Despite turmoil in the Middle East, contagion in the Euro Zone financial system and an increase in the price of oil, the U.S. dollar has still managed to fall in value. It has become of game of investor sentiment rather than conventional fundamental analysis. Investors no longer categorize the USD as a safe haven currency, especially with the inevitable U.S. inflationary measures that will certainly take place over the next 5 years.
However, gold has managed to increase $28 in the past two weeks during this time of global turmoil, increases in commodity prices, and QE speculation. Prices are rising rapidly, but demand has never been higher.
Unless Bernanke can provide a clear and concise explanation regarding deficit reduction without the use of an inflationary strategy (which I believe is impossible), gold with continue to rise.
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