Play on volatility

During times of high volatility, indices that were favoured earlier, go out of fashion.Incremental cash flows head to low volatile instruments.

Some argue, this has been the reason for rise in gold prices to USD 700/troy ounce.

But on careful observation, we realise how true this may be? Is past volatility, proof of what is in store? I seriously doubt it. Recent price action and market participation has pushed up the volatility in the bullion space too, and though ETFs would try their level best to make "volatility" as their pitch (along with correlations), I believe its in a transient phase and more funds investing in gold would fuel more gyrations.