Doesn't all of this just miss a simple point? In particular, when something is in a bull market, you invest in it.
Gold is obviously in a bull market, and I don't see the mania phase yet (which almost always tops commodity bulls), so you invest.
The simple point as you put it is buying gold as a large part of your portfolio is pure speculation. It is NOT investing.
What is a large part? 10%? 15%? I would never invest more than 20% of anything I have in an investment, no matter how much I believe in it, unless I obtain cash flow from it.
Functionally, gold is a hedge. A hedge against fear, and most importantly, a hedge right now against the surmise that paper currencies are worthless. That does, in a certain sense, explain the huge attraction in Asia and other places with historically crappy currencies. It also, from a fundamentals standpoint, explains the acceleration of the bull market in gold in the past 5 years or so.
Does that mean that gold is not a bubble? No, it probably is a bubble. What I do know is that gold is in a bull market, and when it convincingly broke the former high, you had to buy it for the ride.
Maybe the last couple of days is the beginning of the last parabolic spike I talked about. Or maybe not. The problem is with those last spikes - you never know where they end, except that they end badly.