"The historic chart of gold brought back some very old memories for me too.

"I vividly recall the final phase in 1979 during which time the price quadrupled and the very last day was a $60 spike to around $860. Price data was not in the form of the "instant internet gratification" that we get today and we used to huddle around the Ceefax page on BBC2 waiting for the closing price in Hong Kong to be posted every morning. I think they sent it over by carrier pigeon!

"I spoke at a seminar recently with around 100 attendees and asked how many of them had exposure to gold. Not an ETF, a gold mining share or a sovereign amongst the lot of them. Most of them had no idea that they could actually buy bars of the stuff!

"A 1979 style blow off top, which, as you have taught me and many others at the Chart Seminar over the years, is a common end phase in "commodity" markets (but is gold still a commodity? - Answers on a postcard please) would take the price from $1600 to $6400.

And even then it might not be expensive. There are a lot of people out there who don't realise the consequences of the "pound note in your pocket" no longer being "real" money.

"As for the article in the Economist, I fervently believe there should be a health warning on every copy quoting P.J. O'Rourke,

"Economics is an entire scientific discipline of not knowing what you're talking about."

David Fuller's view Thanks for the memories.

Your experience in addressing 100 seminar attendees was revelatory, although I assume that they were interested in gold or presumably you would not have been talking about it.

In that sense, gold is becoming like sex: everyone is interested in it whether they have any or not.

My point which you refer to was that most secular trends end in a blow-off, revealed as a parabolic acceleration on a price chart.

I have no hesitation in saying that gold is still a commodity, albeit a very special one because it has also been a monetary asset for longer than anything else. Its longevity in this role is due to its unequalled status as a reliable store of value over the longer term.

I actually have no price target in mind for gold as there is no meaningful way that this can be calculated. It will be a matter of how much fiat currency - often leveraged - people are willing to commit to gold in a feeding frenzy.

I think price targets get in the way of one's analytical thinking and too many are either based on a wish, or in the forecasting industry, an attempt to attract attention or perhaps a headline.

The price charts will show us if we remain receptive to their message determined by supply and demand. Meanwhile, my more immediate concern: at what point will the capitulation selling which we are beginning to see in stock markets, if it continues, drag down gold and silver as well? Currently it is boosting prices but we know from 2008 that persistent deleveraging eventually hits gold and silver as well.