It is not just in Beijing that Britons have struck gold. In what has been a bleak couple of years for investors, the most precious of precious metals has been a runaway success.
With a rising oil price, an unfolding credit crunch and – inevitably – a slowing world economy, gold has been the investment of choice for many canny operators. Prices have more than doubled in the past three years and are predicted to rise further as economic storm clouds continue to gather. In short, there has been a return to the idea of gold as the last refuge, the fail-safe. The independent financial advisers I speak to tell me that a fair few of their clients have seen it glittering and sprinkled a little into their portfolios.
But as with all things investment related, as soon as something looks a sure-fire bet, it could be time to consider hightailing it out. From its mid-July high, the price of gold has come off to the tune of 16 per cent. HSBC last week shifted its view on gold, saying that it could lose between 25 and 35 per cent of its value – equivalent to what is likely to happen in the UK housing market once that particular horror show has played itself out.
The bank's analysts reckon a speculative bubble has formed in gold – another similarity with the housing market – and could now be about to burst, with some early movers shifting out of the precious metal and into, of all places, the US stock market.
But who is to say that HSBC is right? Just to muddy the waters, the investment bank Investec predicted last Thursday that the gold price would soon resume its march upwards. There is, it says, an undersupply; one leading gold mining company reckons production could fall by between 10 and 15 per cent over the next five years.
It's the age-old quandary for the investor: what do you do when you're hearing mixed messages from the so-called experts? To be frank, both HSBC and Investec's arguments make sense, and if I were to put any number on the future price of gold it would be pure guesswork. However, there are warnings to be had for the private investor if we consider the last gold rush, in the late 1970s.
Back then, prices rose sharply as the world economy reeled from higher oil costs – sounds familiar? – but once the dust settled and speculators saw opportunities elsewhere, the price of gold went on a 20-year slump. Twenty years – now that's a long time for any investor to keep the faith.
When all else is going wrong, gold tends to do well as an investment of last resort. But being a good backstop doesn't mean that it delivers the sort of long-term growth that can help fund your retirement or pay for the kids to go to university. Put simply, despite its glittering performance in the past few years, gold should never be more than a small part of a long-term saving and investment strategy.