As with paper money, explaining why gold is a good store of value is difficult. Here is an asset class that yields nothing and faces a colossal supply overhang: central banks hold the equivalent of almost nine years’ worth of jewellery and industrial demand. Yet the gold price has almost tripled since 2002 and many analysts remain upbeat about 2007.

The reasons are twofold. First, that overhang is structural. Total tonnage held by central banks has fallen consistently over the past six years but rising prices have allowed them to keep gold’s share of foreign exchange reserves pretty consistent at 10-15 per cent. Meanwhile, mining output remains flat.