Mining is done at great cost. Not the price of paper and ink and depreciation on the balance sheet. High demand probably doesn't warrant gold at thousands of dollars an ounce. I guess that something more severe would have to happen. A fiat currency being killed off. And then another, and then another. People will run to other currencies, other commodities, and other countries to find safe havens from the storm being created by central banks around the world.
The US economy is enjoying foreign investment, the world perceiving the US as a country is still the safest haven around. I think that when the S hits the F in the world, US currency hasn't lost all of its reserve status yet. We seem to outperform when international crises occur.
If the US dollar is gold's main competition, I'll take gold going out long-term. I'd rather hold the Aussie dollar under $1.00 US. I'd rather hold the Canadian dollar on a pullback too. China's currency as well. Regardless of gold's strengths and weaknesses and where or where not it's legal tender, the paper from the greatest debtor nation in the history of earth isn't higher on the list of "must buy".
Speaking of volatility, if that's what really matters, China's Renminbi vs the US Dollar 5-year chart: