The revival of interest in gold is also underpinned by debate of a return to the gold standard.
Advocates as varied as Libertarian US Presidential candidate Ron Paul and the Islamic Liberation Party (Hizb ut-Tahrir) have argued that the gold standard is a solution to the deep problems of the global economy.
The gold standard, it is argued, would foster economic stability and prosperity, primarily by creating price stability, fixed exchange rates and placing limits government deficit spending as well as trade imbalances. It will also limit credit driven boom bust cycles through constraints on the supply of money.
The gold standard, opponents argue, would limit the flexibility of governments and central banks in managing economies, restricting the ability to adjust money supply, government budgets and exchange rates. Opponents also point to the inflexibility of the gold standard which may have contributed to the severity and length of the Great Depression.
A return to the gold standard would also confer a natural financial advantage to countries that produce gold, such as the US, China, Russia, Australia and South Africa. Geo-political considerations and global competition make this unlikely.
There are also limits to supply. In all human history, only about 140000 to 170000 metric tonnes of gold have ever being extracted. Annual production is around 2400-2800 tonnes of gold.
The world's existing stock of gold is equivalent to about two or three Olympic standard swimming pools. The value of this amount of gold is over US$ 6 trillion, roughly 10% of everything that the world produces in a single year and a tiny fraction of global wealth and assets.
Limited central bank holdings of gold constrain a return to the gold standard. The US, German and French central banks have gold stockpiles valued at 250% to 300% of their reserves of foreign currencies. China, India, Russia, Brazil and South Korea hold between 0.5% and 10% of their foreign reserves held in gold.
If the central banks of China, India, Russia, Brazil and South Korea sought to increase their gold holdings to a mere 15% of foreign reserves, these countries would need to purchase more than 10000 tons of gold. The US, the world's largest gold holder, holds a little over 8000 tons.
Max Weber, the father of social science, defined the state as the agency that successfully monopolises the legitimate use of force. The state, through its monopoly over the printing presses, has almost total control of money and the economy. Money is now a matter of pure trust. American dollars still bears the words: "In God We Trust." But God is not directly responsible for control of money, it is governments and central banks. Politicians and policy makers are unlikely to willingly cede the power that a paper money system provides.