Gold is not in a bull market only because of inflation or fears thereof. It is rising because the big money knows that high levels of government indebtedness can't last indefinitely and that currency devaluations must accelerate if the global economy is to produce a sustainable expansion. Currency devaluations reduce purchasing power and produce long-term inflation. Also, major central banks in the United States, Europe and Japan will be slow to hike interest rates as consumption stalls and labor markets struggle to recover. Central bank policies will remain bullish for gold for the foreseeable future.
Therein lies a point for debate. Is gold discounting a rise in future inflation, which will be caused by partial monetization of sovereign debt being added to earlier monetary stimulus, or is inflation becoming irrelevant to gold's rise? The broader U.S. money supply measures are contracting, even though the narrower M1 had been expanding at a nice clip throughout the crisis. There are hints of inflation, but so far there's been no real upsurge. There hasn't been for about two years now. Nevertheless, gold is still rising.
Is it doing so on the strength of deficits leading to greater inflation, or is it doing so simply on the strength of the deficits? If the latter, then a resurgence of inflation is going to accelerate its rise.