Like a cure-all tonic prescribed by a travelling rural huckster, gold somehow seems to be good for nearly everything that ails us. Just consider the diverse economic backdrops that have caused its price to spike over the years: stagflation, financial panic, speculative mania and currency debasement.

Back in 1980, when the yellow metal hit $850 an ounce – still the record in real terms – western economies were being squeezed simultaneously by the second oil crisis and record postwar inflation. Fast-forward to March 2008 when it broke through $1,000 for the first time on safe-haven buying as Bear Stearns teetered. It approached the same level a few months later when bank worries had eased temporarily but commodity fever was peaking, and again in mid-September when Lehman's collapse created so much demand that smelters were working overtime churning out bullion.

The common thread connecting these episodes was fear. But for those who rushed to buy near the top, peace of mind was costly. It would be tempting to dismiss the latest surge above $1,000 an ounce as more of the same were it not for concerns about the currency in which its price is denominated. The trade-weighted average of the US dollar against six world currencies neared a multi-year low around 77, down from 121 eight years ago, as foreign creditors fear an endless stream of red ink from Washington.