"When investors turn to cash in an attempt to minimise losses in their portfolios, and as strange as it may seem, they still turn to the perceived safety of government bonds and cash. In the short-term cash is a safe-haven asset, but in the longer term, the value will be eroded by inflation and currency debasement. And, when it comes to government bonds, I maintain that there is nothing safe about these debt instruments especially when the governments issuing these bonds are essentially bankrupt. But in addition, the current yields are so low that they barely cover for inflation, or they are so high that they indicate an inherent weakness which suggests that the risk of investing may also be too high. While investors flee the euro and turn to the US dollar, it is not going to be long before their attention turns from the Eurozone back to the USA. But, in addition to these two major global currencies, the Yen, and Sterling are not much better alternatives. In other words the fiat currencies of the world are crumbling and as individuals around the world recognise what is going on and lose confidence in these paper currencies, they will turn to holding real tangible assets, in particular gold and silver.
"The fundamentals driving the price of gold have not changed and the main driving force still remains the problems going on in the global monetary system."