This means that Europe is still in trouble. That was underscored by the fact that Germany was unable to borrow the full amount it wanted at Wednesday's debt auction. Borrowing costs were down but the country didn't get bids for 35% of its bonds. The European Commission was discussing the possibility of eurobonds Wednesday with gold used as collateral, according to the Financial Times, and cries are getting louder for the European Central Bank to become the lender of last resort, or print money to save the euro. Both of these options are positive for gold. Using the metal as collateral doesn't mean selling it but supports the bulls' thesis that gold is money and a viable alternative to paper currency. More money printing in the ECB coupled with accommodative policies in the U.K. and U.S., could also spur inflation worries and highlight gold as a store of wealth. "If Europe sinks then it would impact all currencies," says Norman of SharpsPixley, "and be a positive for gold." Norman thinks the gold's inverse correlation to the U.S. dollar would disappear and that there would be a "considerable rally in the gold price." Even if gold was used as collateral for a eurobond, Norman argues that is a positive for gold. "It highlights the fact that it is the asset of last resort ... gold is the asset that holds it value and it underlines gold's incredibly important roll." People's Bank of China also cut reserve requirements for five local banks Tuesday, which means they are allowed to hold less money in their coffers. The hope is that the banks will lend the money and help ease the rate of China's slowing growth to engineer a soft landing. The move wasn't accommodative but it is laying the ground work for something more aggressive like cutting rates or providing stimulus. China's inflation rate is at 5.5% and the World Bank said prices could fall to 4.1% next year. With inflation less of a risk, China might be more apt to pump more cash into the system, which is bullish for gold. Gold mining stocks were lower Wednesday. Yamana Gold ( AUY) was down 2.14% to $15.06 while Kinross Gold ( KGC) was losing 1.15% at $12.95. Other gold stocks, Agnico-Eagle ( AEM) and Eldorado Gold ( EGO), were trading higher at $42.28 and $16.83, respectively.