The parable of the talents contains a timely warning for the gold market. In the biblical story, the master distributes his wealth between three servants. The first and the second put their capital to work in businesses and generate healthy profits. The third, scared of losses, buries his share in the ground. The master praises his two active managers for their performance, but consigns the proto-gold bug to “outer darkness”.

In today’s world a lot of wealth is, in effect, being buried. All the gold mined is still in existence. At current prices it is worth about $8,000bn. This means the world is assigning around the same value to its store of this sterile, unusable asset as to the combined stock markets of Germany, China and Japan. Gold’s recent dizzying ascent – swiftly followed by a sudden slide, as it fell $160 per ounce between Tuesday and Wednesday of this week – has been ascribed to loss of faith in the banking system, paper currency and also in the political leadership of the industrialised world.

Fear is certainly a factor. When Ron Paul, a US libertarian politician and veteran critic of the Federal Reserve, disclosed recently that his top 10 equity holdings were all gold and silver mining stocks, the news reverberated around the blogosphere. According to the Gold and Silver Blog, “Ron Paul has taken steps to protect himself from the disastrous effects that Federal Reserve policies will ultimately have on the value of the US currency. The average American would be well advised to follow his lead.”