This dollar strength is very temporary. Even dumb Europeans dont want to lend their money to the US for ten years and essentially lose money. This is just buying short term insurance to conserve capital. These european funds will move out of treasuries in the next few days as things settle down ins Europe post downgrade, and the dollar will weaken and gold will regain its losses and then some. Ninety- seven precent of todays gold move is due to currency fluctuation and nothing else.