Gold bugs have always been bores, but perhaps now they’ll be a bit quieter

Unless you bet your life savings on gold some time in the past three years — after its price had passed on the way up the level to which it has now fallen back — there’s no need to be distressed by headlines about a ‘gold rout’, nor even the prospect of a ‘bear embrace’.

The impulses behind this sudden downward lurch are positive for expectations of economic revival. Gold is the timeless safe haven for those who distrust governments and fear inflation, so a stampede of sellers — on Monday there seemed to be virtually no buyers — indicates an ebb tide in those sentiments. In the US in particular, there’s a feeling that what ideological gold enthusiasts regarded as the inflationary debasement of the dollar by the Federal Reserve’s programme of quantitative easing is finally over, and that equities are the attractive option as recovery gradually takes hold.

Gold’s all-time high above $1,900 per ounce occurred back in September 2011; the price has slid by a third over the past six months while stock markets have steadily risen. Two factors that might have revived the metal’s safe-haven appeal — North Korea’s nuclear sabre-rattling, and the confiscation of bank deposits in Cyprus — failed to do so, indicating that a bear mood (in which a market barely responds to bullish signals) had truly set in. Many investors decided to get out even quicker when they heard that Cyprus intends to sell ten tonnes of gold reserves to raise cash for its bailout, prompting fears that other busted euro countries will do likewise, thereby driving the price downwards in a repeat of the notorious Gordon Brown Gambit of 2002.

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Julie Burchill

Will I ever pee again?

So that’s why gold has fallen off a cliff. I don’t wish ill fortune on anyone — not even the New York hedge fund manager John Paulson, who made a billion dollars shorting UK bank stocks in 2008 but may now lose a billion on his gold positions.