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Nobody in the gold space will acknowledge that rises in any specific currency will probably have a direct effect on the gold price, but this is a truism that has been maintained throughout. Its very convenient to point that out for the moment, disregarding interest rates.

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If you had been following the gold bull market, it will have been the steady decline of interest rates the world over in the backdrop.

One thing that might set Japan apart from the rest of the G8 is their abhorrence of negative nominal rates. Whether they have a real return bond adjusted for inflation, or have by way of policy avoided the inevitable for decades is an open question.

A negative nominal rate in the overnight or three month treasury bill has become a fact in Swiss and German bond markets, and briefly encountered in the Euro Area Yield Curve. Anyone might feel that central banks not having rates below zero might have been well-administered.

In Canada, we still have a raging housing/banking bubble, in the U.S., clearly a stock bubble. Wherever a bubble is being maintained, short term rates will remain above zero. The Euro area certainly still maintains a housing bubble in the North, while in the South, and in Ireland, housing bubbles have already calamitously collapsed. The banking bubble has certainly come off, much as it had on Wall St. with the financial crisis.

http://www.reuters.com/finance/stocks/chart?symbol=UBS Look at the MAX chart for UBS.

Much as people like to tar Europe with a single brush, its just not as simple as you might expect, because some banks only took off once the financial crisis washed over, and banks could once again frummel with mortgage backed securities. You would think they aught to have been players in the gold space by then.

What if Japan concedes defeat and allows negative nominal rates, as you have in TIPS, almost across the entire yield curve, something unthinkable at present?

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-F6