Gold has suddenly spiked higher, recovering $620 in US Dollars but also rising sharply against Euros and Sterling.

"Thin liquidity as we move towards the holiday season, along with lack of autonomous impetus in the market at present, suggests that gold prices are likely to remain highly sensitive to dollar movements," claimed analysts at Barclays Capital in a note earlier.

But factor in gold's sudden jump against all major currencies – starting from the same point that European investors began the year in January '06 – and this move looks driven firstly by bargain-hunting, and secondly by a plunge in the Thai stock market overnight.

The Thai stock market lost $23 billion in today's session after the central bank in Bangkok said international investors must pay a 10% penalty if they attempt to withdraw their funds within one year.

The Thai government has since put away its crack-pipe and reversed the decision. But the risk of exchange control on foreign investment "is offering some support to gold," reports one US dealer. "A lot of traders automatically think of the currency crisis in the mid- 1990s..."

A currency crisis? That's the last thing today's over-geared and over-stretched financial markets would need. But history says it's only a question of when, not if – click here to read on...