"At every Yellen Fed meeting, she parrots the phrase that the United States is committed to higher rates, which creates a knee-jerk sell-off in the metals, and then when the rhetoric is analyzed, the markets assess the limited options opened to the Fed," Hug said. He added that it is important to note that recent Yellen jargon is now focusing not only on the Fed's domestic targets (employment/inflation) but also global issues (deflation/negative rates).
"Yellen has to promote optimism, which then leaves a rate hike open, but is not likely to raise rates under current conditions. So 'sell jargon and buy the reality' has been the posture for gold traders," Hug said.
Hug said the the first rate hike "was not a function of economic strength but more a matter of saving face."
On Wednesday, the gold trade seemed to cut through the jargon, and global woes may keep the gold bugs optimistic as far as gold's fear- trade premium. But gold bugs have not come out ahead, at least so far, in the brief Yellen era. Notwithstanding this year's big gains, GLD is down roughly 2 percent since Feb. 3, 2014, when Yellen was sworn in as Fed chair, while the Dow Jones Industrial Average and S&P 500 have gained considerably, thanks to sizable 2014 gains.
Merk said in a world in which cash that doesn't pay any interest is competing with other cash that pays no interest, "The long-term story for gold is in place."
CORRECTION: Axel Merk is president of Merk Investments, which runs the Van Eck Merk Gold Trust ETF. His name and the fund's name were misspelled in an earlier version of this article.