As the barter system evolved, a system of currency became necessary. For a variety of reasons, gold was best suited to perform this function. Should the current financial system of currency (paper and electronic money) cease to be function, gold will re-assert its role as the arbiter of value.
Gold's Value During Crises
Throughout the relatively recent past, gold has experienced some bull runs during tough times, and many of the conditions that existed during those times are present today. However, recent trends are not needed to prove gold's ability to be a strong investment in a weak economy. During the Great Depression, gold was one of the most solid investments. What's perhaps even more startling is that gold investments quickly soared in value when the Depression was in its worst years, and then actually started to fall as the United States recovered.
Gold's Value as Currency
For a variety of reasons, one of which being the difficulty of quickly exchanging perishable goods, a permanent currency will always be needed to replace a pure bartering system. This currency would need to be rare and unique enough that most people would not quit their jobs to find it or reproduce it. It needed to be non-perishable and durable. Finally, it needed to be recognizable as having some kind of value all on its own. Gold, along with other precious metals that can be used to produce jewelry, has all of the required attributes to assume value of currency and did so for much of the world for hundreds of years.
Could Gold Soar?
Gold will almost certainly become the currency of the world again if the current financial system collapses. Gold still possess all the traits needed to serve as a currency in a barter economy, and what's more, investors already recognize it as valuable. Gold is not linked with any particular company or government, so its value can never be completely extinguished. The only way gold's value could completely diminish is if it lost one of its aforementioned special properties that make it fit for currency. If a scientific breakthrough suddenly realized the "lead into gold" dream of alchemy, that would effectively destroy Gold's value. Such a scenario, while technically feasible, it is unlikely to occur on a massive scale at any point in the near future.
Due to the nature of the bartering system, any reversion to it would require a new kind of currency. Gold had the qualities required to serve as this currency in the past and it would continue to have those properties in a future crisis. Gold's spikes in value during economic uncertainty are evidence attesting to this theory. This makes gold a potentially solid investment in a bear market.
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