The rising concerns in regards to the faith of the European Union continues to
grow; the recent agreement struck in the EU Summit in Brussels has failed to
ease the speculation around the instability of the European Union. There are
mixed signals in regards to the effect of the European Debt Crisis on gold
price: Some speculate that the EU crisis pushes gold price down and other think
the opposite, so which is it? Many explain the connection between the EU debt
crisis and changes in gold price via risk level in the markets: as the risk
aversion in the markets rises (which could be stem, in part, from the debt
crisis in Greece/ Ireland/ Portugal/ Italy and so forth), traders lean towards
safe haven investments including gold and silver. But in recent months there
have been a paradigm shift and I suspect that precious metals prices follow the
direction of the Euro. The chart below shows the development of the Euro/USD and
gold price during 2011 (until November): The chart shows that gold price rose
during most of 2011 until August when it started to fluctuate and sharply
declined. Most of these falls, mainly in August and September were
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