The mood among gold bugs is more upbeat than it has been for many years. Gold prices are approaching 18-year highs. Even central bankers, who have been net sellers of gold for the past 40 years, have expressed conditional support for increasing their gold reserves.

Gold dealers have worried for the past two years that the rise in gold prices from their lows of $250 in 1999 would come to an end, simply because gold rallies have not lasted this long since gold was freely floated in 1968. But continued demand for the precious metal has continued to sustain the rally.