Gold is seen as a kind of hedging and especially in last year it has been safe investment in credit market meltdown. Many traders expected gold price easily to cross above $1000 with ongoing financial turmoil. But the trend goes down now. Major impact has sharply strengthening US dollar. As you can see on the picture below the price again testing declining support line.
And where the gold is heading now? This is the video technical analysis published by Adam Hewisons.
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Some good analysis here. Looking at the longer picture based on some analysis I wrote about, I think Gold may have more going for it than not. Deflation and slow growth may be short term issues, but as the stimulus kicks in and an economic recovery starts. gold could become a big hedge against the subsequent inflationary pressures as you alluded to here.
Thank you Andy for your comment. It looks like gold found support line and started longer bullish trend.