Gold investors seem to be splitting into two camps at the moment, those that believe there is absolutely no future for the Euro and those that, while concerned remain hopeful that the world as we know it isn’t about to come crashing to an end.

UBS it seems falls into the latter category. In its Global Commodities Outlook report for 2012, the bank writes: “We expect the Eurozone crisis to intensify to the point of a ‘big bang’, namely only when the clear alternatives are breaking up the Eurozone or systemic collapse will EU politicians be compelled to accelerate fiscal convergence; that should ultimately change sentiment significantly.”

That point seems to be rapidly approaching and, is most likely going to be reached one way or the other during the next ten days, the whirlwind timetable for which is well spelt out by today’s edition of the Financial Times.

And, the bank does acknowledge that 2012 is likely to be overshadowed by the potential of a coercive Greek default forcing an exit from the Eurozone, major bank failures, and the long-term yields of Italian and Spanish bonds remaining above 7% for an extended time. All these events could puncture sentiment, trigger credit squeeze and would almost certainly result in lower commodity prices.”

But, it says, such events could be counterbalanced by “preemptive policy action by the US, China and EU to recapitalise EU banks and restructure peripheral European debt. Concerted global action may have a significant stimulus effect on the more leveraged and commodity intensive economies such as the emerging markets.”

For some, like independent Investment consultant and 40-yearveteran of the markets, Rick Schmull, such hope is unfounded as the point of no return has been reached.

Speaking on’s Gold Weekly podcast, Schmull said, “Things will get much worse and there is no soft option ahead….I see a sudden break up – it will be overnight.  I think the problems are too large – the whole thing is coming crashing down suddenly and we will have a number of years of depression in Europe.”

So what does this mean for gold?

Looking at the worst-case scenario first, for Schmull, the destruction of the euro will mean an increasing role for gold.

“Obviously gold will play an increasingly large role in the solution to our problems because the FIAT money system that we’ve had in the last 40 years is on its last legs because unlimited credit is impossible and eventually implodes – and that’s what we’ve had.  We’ve had a system with no discipline and eventually gold will have to re-enter the monetary system at a much higher price which also means of course, a dramatic devaluation of all currencies within the current system,” he said.

For UBS, the future, while by no means rosy, isn’t quite as apocalyptic.

“We continue to see gold more as a ‘safe haven’ rather than a ‘risk-on’ asset in 2012, as the European sovereign debt crisis, exacerbated by recession, and the US debt concerns, returning in Q112E when its US$15.2trn debt ceiling is likely, reached, are expected to dominate investor sentiment again, it writes, adding, “We view the risk of European CB gold sales as extremely limited. A modestly stronger US dollar for 2012E could cap gold’s advance. Strong physical buying needs to persist, as otherwise gold is heavily dependent on investor participation.”

Given the volatility and the political brinkmanship happening both intentionally and unintentionally around the world at the moment, there is no real way to tell which side of the edge Europe will fall; although it is clichéd, about the only thing one can say with certainty at the moment is that more uncertainty looms. And that gold will have a role to play.