I've been watching gold for a while. If the US is recovering (I think the evidence is becoming convincing), then the era of declining US real rates ought to be over. In other words, we've had the final Fed easing (QE-infinity), and from here on it's tightening at the margin.
There have been 3 clear beneficiaries of falling US real rates, in my opinion : the yen, gold and long dated treasuries. Other candidates, like the euro, copper or equities for example, have all had some flaw which has counted against them (respectively, the flawed structure of the EU, dependence on industrial demand and hence reflation, and risk appetite). The first 3 caught the full force of Bernanke's easing.
The yen has already started to slide. It can't be as good a short now as at 77. I'm short some fixed income, but it's still too early to go to town on it perhaps (the Fed is still buying via QE, and it's negative carry, and there's lots of talk about Treasuries being in a bubble : not an ideal backdrop). Gold is a different story. It's never been more widely owned as a retail investment. Its bull market has been running in earnest since 2002 - about the same time that equities peaked, more or less. No-one appears to think gold is a bubble, or if they do they're either too embarrassed to say it out loud, or ignored when they do. The point is, the idea that gold might be a bubble is far from a mainstream one.
Finally, it's already come off its high. No-one who bought gold and held it in the last 6 months (and a hell of a lot of people have done exactly this) is in the black. Another $100 lower and everyone who bought since Jul 2011 is under water.
To cut a long story short - sell gold. It hasn't decisively broken, so dip a toe in the water, and hope to be able to get some more sold at higher levels. It might even be worth selling the 1700 calls perhaps...
sell 3 GCJ3 at 1646.30
GTC orders :
sell 2 GCJ3 at 1676.00
sell 5 GCJ3 at 1699.20