First, gold prices surged past $1,400 an ounce. Then, they dropped back to around $1,300. As Americans get less uncertain about the economy, where do gold exchange traded funds (ETFs) fit in?

SPDR Gold Shares (NYSEArca: GLD) returned almost 30% last year. So far this year, it’s down 6%. Same for the other physically-backed options ETFS Physical Swiss Gold (NYSEArca: SGOL) and iShares COMEX Gold (NYSEArca: IAU).

The question now is whether the pull back is a broad sell-off or a buying opportunity disguised as a short-term dip, says Ben Baden for U.S. News & World Report. [Gold ETFs Sliding; Now What?]

Let’s face it: the markets aren’t quite as scary as they used to be, meaning gold’s role as a safe-haven asset is diminishing somewhat. Investors are coming back to the stock market, shedding fixed-income and adding exposure to equities. They’re emboldened by a declining unemployment rate, stronger retail sales and GDP figures that continue to show improvements.  [ETF Correlation Among Asset Classes Is Dropping.]

The other side of the coin has some compelling arguments for gold. The need for precious and industrial metals is still strong. Platinum, palladium, silver and copper also gaining hefty investor interest.

The real answer to what’s next for gold really lies in the trend lines, and gold funds are sitting on top of the 200-day moving average at the moment. Whether gold decides to show signs of life again or continue to deflate, the 200-day can be your guide in how to react.

Tisha Guerrero contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.