The yellow metal dipped to a six-week low under $1,500 an ounce this week. Parliamentary support for Greece's latest austerity package allayed fears of an immediate debt default. The end of the Fed's money-printing programme (QE2), which had stoked fears of inflation, has also tempered enthusiasm for a safe haven. But the gold bull market that began in 2001 is unlikely to be over yet.
For starters, the euro crisis is set to drag on. With developed economies still weak, there is talk of more money printing (quantitative easing) in both Britain and America. Even if this fails to materialise, interest rates all over the world are negative in inflation-adjusted terms. So fears of currency instability and debasement through inflation are likely to endure. That's good news for gold, the ultimate currency and store of value.
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