Stocks have wiped out their year-to-date gains. U.S. payrolls are down, and unemployment is up. Yields on high-demand government bonds are at record lows. Speculation abounds that the Fed might print even more money. Is it any wonder some are talking about gold's rebound?

After weeks of gold following other commodities downward, it only took one surprisingly weak monthly U.S. payroll report to send investors running to ingots like prospectors to Sutter's Mill. Friday's 4.3-percent surge in gold, to $1,620.50, reminded everyone of the precious metal's special place in the financial market.

Whether gold will continue to recover from recent losses is yet to be seen. Some market-watchers cite factors such as India's financial woes -- India is the No. 1 consumer of gold -- and recent weak turnover at the Shanghai Gold Exchange as evidence that Friday's $35 rebound in gold doesn't signal a continued rush by worried investors.

Glimpses of gold's safe haven behavior are quite encouraging. But these do not do much to reassure nervous investors, who require a more consistent and sustained safe-haven response from gold in order to be convinced, said a commodities report from UBS.  

Gold declined slightly on Monday to $1,617.60, as expected following the sharp rise that ended the previous week. It was a rally unseen since September 2008 after the U.S. taxpayer rescued American International Group Inc. (NYSE: AIG), Lehman Brothers collapsed and talk of a new Great Depression was in the air. (Few things get people thinking about hoarding gold more than the prospect of the collapse of the banking system.)

Friday's market reaction to added U.S. economic uncertainty raises the prospect of further monetary stimulus; gold prices should better reflect such actions, said a note from Birmingham, Ala.-based investment house Sterne Agee, which bullishly predicts gold ending the year at $1,800 an ounce and breaking $2,000 next year.  

Gold had been on a steady decline, losing 14 percent of its value since its peak in August last year.

The euro zone crisis that intensified capital inflow into U.S. and German bonds had been forcing gold prices down, but according to HSBC Global Research the relationship between lower U.S. bond yields and lower gold prices has been severed despite the continued decline in the yields. The reason is simple: Bond yields are so low they are offering virtually flat returns. In Germany's case, three-year bonds were recently so low that if they had declined any further investors would have had to pay to lend money to Europe's strongest economy.

We believe low U.S. and German bond yields leave investors with few quality assets to choose from and may benefit gold, said HSBC in its Friday commodities report.