Many investors have given up on the idea that gold merits consideration in their portfolios due to years of depreciation in the dollar price of the yellow metal. For one thing, the SPDR Gold Trust (GLD) is still reeling from 35% bear market losses since the heyday of 2011’s euro-zone crisis. Similarly, sharp increases in the value of GLD shares at the start of 2014 and 2015 were both met with vicious selling pressure and, eventually, more declines.

Perhaps ironically, investors who lack trust in European banks have not given up on gold entirely. In fact, over the last six months, gold denominated in euros has catapulted nearly 16%. Investors interested in capturing the uptrend that began with the official announcement of European quantitative easing (QE) may want to look at the AdvisorShares Gartman Gold/Euro ETF (GEUR). Note: The average daily dollar volume of $550,000 may be a turn-off for more active traders.

Yet before one gives up entirely on the prospect of owning gold in dollars via GLD, consider what negative bond yields in Europe are communicating. The markets, albeit manipulated by central bank intervention, guarantee that you will lose money by holding 5-year German or 5-year Swiss government bonds to maturity. The yields are -0.15% and -0.45% respectively. On the other hand, holding an instrument with a negligible loss might be a viable method for avoiding a fragile banking system.

Am I saying that European banks are broke? I can’t say that. I can say, however, that the European Union’s law forbidding taxpayer bank bailouts goes into effect at the start of 2016. When people consider the new law alongside the recent past (i.e., depositors losing 1/2 of their money in Cyprus banks) and the not-too-distant future (i.e., Austria ends government insurance for bank deposits in July), one can see why currency proxies like gold may start to shine.

There are other reasons why gold can recapture the public’s imagination. It tends to outperform other assets when fears of deflation become pronounced. High profile gurus such as Jeffrey Gundlach contend that the prospect of ever-falling prices are pushing investors toward accepting a small loss on government bonds. If investors are as worried about a deflationary spiral spreading across Europe, in spite of central bank stimulus efforts, they might also be  attracted to the perceived safety of the world’s most renowned precious metal.

Granted, the greenback is the currency superstar for the time being. Its strength makes it difficult for GLD to gain significant traction. On the other hand, if data for the U.S. economy continue to miss expectations as we get deeper into May and June – if the notion of a temporary bump in the 2015 road gives way to signs of widespread deceleration – GLD would get a bona fide lift.

One way to assess whether or not gold (in dollars) has any legs is to track the SPDR Gold Trust (GLD):PowerShares Dollar Bullish (UUP). price ratio. If GLD:UUP can break above and stay above an intermediate-term 100-day average, I’d have greater confidence in the precious metal’s ability to outperform competing asset classes like stocks.