Gold is a hedge against US dollar. US dollar is an overvalued...

Gold is a hedge against US dollar. US dollar is an overvalued currency, but some disturbing trends, since Nixon severed the link between gold and US dollar. US dollar as a reserve currency has been attributed to the petrodollar i.e trade in oil in US dollars. China is the largest importer of oil and starting to do petroluem deals with Saudi Arabia in yuan. Russia and China, both have aspirations to break US dollar dominance.

Now we starting to see a trend of China selling off US treasuries. The only reason US can afford to have continual large deficits is because of demand for US dollar as a reserve currency... if you see this confidence in the US dollar break down, you might see US$10,000 gold price.