Zero for growth, yield, velocity and confidence: We believe there are nearly zero real options available to global policy-makers. The world needs growth and is willing to go to extraordinary lengths to get it. This is creating distortions where old rules don't seem to apply and where investors face a number of paradoxes.

Golden prospects: We believe the macro-economic environment for gold is once again turning more positive and forecast prices to exceed USD2,000/oz in the first half of 2013. We believe the growth in supply of fiat currencies such as the USD will remain an important driver.

Gold as Money: We describe the gold vs. fiat currency debate from the perspective of Gresham's Law. To describe it in the simplest of terms, gold's value depends in large part on the degree of ‘badness' of bad money. This lends a certain art to the science of forecasting gold prices.

Eoin Treacy's view A decade ago when we spoke of gold being remonetised in the eyes of investors, it was viewed as a wildcat idea. My how times have changed! Investment demand for gold continues to hit new highs as the wholesale debasement of fiat currency continues unabated. The popularity of ETFs as vehicles to reflect this view continues to grow and the allure of the metal for the newly wealthy in Asia is an additional spur to demand. Concurrently, miners have spent a great deal of money attempting to increase supply but have not kept pace with the bullion market.

Gold prices have been in a process of consolidation for more than a year following the acceleration to a peak above $1900. The impressive rally over the last month has taken gold back to test the $1800 area when it has at least paused; allowing the short-term overbought condition to unwind. A sustained move below the 200-day MA, would be required to question potential for additional medium-term upside.