How high can the price of gold go? No one can be sure but everyone has an opinion. "I believe gold is worth a great deal more than the price it's currently trading at, based on my own expectations for the rate of inflation and currency devaluation.
I value it at around $3,800 an ounce," said Paul Tustain of gold investment firm Bullionvault.
But then again, Mr Tustain's business has grown massively off the back of the march of gold. Others, though, are positively bearish about gold: all we are seeing with the most precious of precious metals currently topping $1,500 an ounce and up nearly $300 in the past few months is nothing more than a bubble.
"There are now vending machines in the Far East dispensing gold ingots to invest, paid for by credit card. I can't think of a clearer indication that we are living through one of those bubbles in history which when the world economy settles down will go pop," David Kuo from investment website fool.co.uk said.
The arguments of gold bulls and bears seem equally cogent. The bulls point to the growth in demand from the Far East, and the old law of supply and demand. "Gold prices can still go higher," said Darius McDermott from Chelsea Financial Services. "Commodities are based on supply and demand and gold has limited supply while demand is strong. You have the Chinese government and individuals buying gold as a way of diversifying away from the US dollar. With inflation high in some of the emerging markets gold is being used as a hedge against rising prices."
There is also the traditional boost to the price of gold: political instability in the Middle East as well as growing fears that some countries – even major economies – may not be able to repay their massive sovereign debt. "It is the ability of gold to rescue your finances when things go badly wrong that gives it a valuable premium above its long-term base value," Mr Tustain said.
The bears, on the other hand, say that the massive increase in gold prices reflects underlying insecurities and speculation, and once these subside the bottom will fall out of the gold market. "Looking at the long-term gold price charts confirms that over the past century, there have been six or seven spikes which have subsided as soon as the underlying cause for investors buying up gold has subsided," said Mr Kuo. "Fears about inflation and sovereign debt are around now, but these things will pass eventually; what is driving the gold price today will go away tomorrow. Buying an investment based on fear and greed are two wrong reasons."
Mr McDermott, despite his belief that gold may appreciate further, suggests investors tread with caution. "Buying gold direct in coin or ingot form is expensive in most instances. A more apt way to take advantage for investors who are can handle the risk is to look at mining shares. Traditionally, mining company shares have outperformed the price of gold, but at present they are trading at a discount of 30 per cent. So even if you believe gold is near the top of its price there should be some room for mining stocks to appreciate in value," he said.
"Two funds which invest in these companies and are worth a look at are Black Rock Gold and General and Smith & Williamson's Global Gold and Resources. If you really like the thought of owning physical gold, then there are exchange traded funds which actually own gold in a bank vault on your behalf. All in all, though, gold is a high-risk investment and it should not be part of your first equity individual savings account."
In fact, Mr Kuo points out that many people already have a stake in the price of gold without perhaps realising it. "If you have units in a fund which tracks the FTSE or even money in a personal pension, then you already have a fair bit of cash tied up in mining companies. Do you really want any more?"
As for those who fear they are missing out on a new gold rush, Mr Kuo offers cold comfort. "Look, you've missed the boat on gold and you will have to probably wait 20 or 30 years before it comes around again," he said.
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