The rout says a lot about consumer confidence in the worldwide recovery. The sharply reduced rates of inflation combined with resurgence of other, more economically productive investments, such as stocks, real estate, and bank savings have combined to eliminate gold's allure.
Gold is like an undated zero coupon inflation bond - when real yields turn negative gold prices rise, when real yields turn positive gold declines.
Correlation of yearly T-Bill minus CPI % changes to gold % price changes since 1972 has been something like -0.6.
Being a 'undated bond', golds volatility is high (more so than a long dated inflation bond).
Opposite end to stocks which are like a undated variable coupon conventional bond (more volatile than long dated treasury bonds).
As in how you might shorten stocks duration by combining with some shorter dated treasury bonds (barbell) to yield intermediate bond (bullet) type risk rewards, so gold might be combined with shorter dated inflation bonds to shorten the duration.
One investor might opt for a portfolio comprised of a barbell structure - perhaps 15% gold, and as gold is more volatile than stocks in general opting to balance that with 15% above average volatility stocks (small cap value perhaps), 20% long dated treasury (higher weighting to account for lower volatility), 50% T-Bills (that are similar to short dated inflation bonds, and again lower volatility so higher weighting). Collectively that might broadly yield similar results to 100% in 5 year treasury (bullet).