What’s to deny about the trend in gold prices? You don’t have to be a gold bug to see what’s happening.
In some way or other, the main factors causing the price of gold to continue to rise can all be boiled down to (a) insurance and wealth protection due to general uncertainty regarding the U.S and European economies and (b) speculative investing also due to negative economic forecasts.
The balance sheets of the US government and some EU countries look really bad. Yes, they are mostly insolvent, and if they were corporations would face bankruptcy. If they were a third world country it's currency would have plummeted dramatically.
Call it “competitive debasement,” but for a multitude of reasons, most central banks around the world have needed to lower their own rates to keep up with the lowering at the Fed (or they’ve undertaken other means of weakening their home currencies to protect their exports). All this means that bonds and cash don’t pay much at all the world over - so gold becomes an obvious trade. Low rates also create asset bubbles, and gold is a smart place to be when bubbles pop.
