Massed bagpipes, fine malts and a bullish outlook for London's professional gold dealers...

RHONA O'CONNELL did it on the train home, John Reade managed it before the conference finished, and Ross Norman's team were at it throughout.

The little-known state of the gold market right now...

YOU WON'T read this in the financial pages, nor elsewhere online. But this autumn's gold rush has in fact has been no such thing to date.

Conference season is heating up fast as fall arrives for the gold industry, bringing the typical raft of forecasts, predictions, outrageous price targets and deep, if less ball-breaking, analysis.

What might the World Gold Conference in South Africa say about the former world No.1's collapsing output, down by one-half in 10 years? Will the China Gold Summit spot that private households are putting twice as much of their ever-growing savings into gold as a decade ago? Will the London Bullion Market Association even bother to note the idiot claims about "Hong Kong pulling all its physical gold holdings from depositories in London" (yes, both tonnes of it...Gasp!) at this November's Edinburgh conference...?

Much was made of the fact China overtook South Africa as the world's No.1 gold-mining producer in 2008. But that came due to South African output halving from its late-90s' peak.

More still was made of the surge reported this spring in China's official gold reserves, up 75% by weight in six years to 1,054 tonnes. Worth $32 billion, however, that lump of metal badly lagged growth in the People's Bank's total reserves. Thanks to Asia's "savings glut" – obverse of the West's "galloping consumption" – the PBoC's hoard of foreign currencies swelled by more than 300% to over $1.7 trillion.

The gold market typically ends its summer doldrums with a sharp move higher as autumn draws in. Twenty of the last forty summers saw the price dip before rising sharply to end the year higher, above both January 1st and the spring peak.

Will the mode apply again in 2009? This summer sale knocked some 10% off the February and June peaks in Dollars. For Sterling investors, it offered the steepest discount to early-year peaks since 1992, as the Financial Times noted last month, quoting our research here at BullionVault. And now "Gold volatility is set to rise as we head into September," reckons Walter De Wet at Standard Bank, writing a note to clients Friday morning.

"The Dollar is not a good store of value," says Nobel prize-winner Joseph Stiglitz, finally catching onto the last nine decades' 95% loss of purchasing power.

"Right now," he told an audience in Bangkok on Friday, "the Dollar is yielding almost no return and yet anybody looking at the Dollar has to say there's a high degree of risk."

One thousand dollars doesn't buy what it used to – not for non-US investors.

Back in March 2008, when the gold price first broke $1,000 an ounce, the euro equivalent peaked just shy of €660. Sterling investors here in the UK saw the price touch £515 an ounce.

Beware of the clamor to call the bottom in house prices.

Because with a tired predictability, the UK experience of seeing "green shoots" in every new survey says the global bust, which started barely two years ago, has a long way to run yet.

"For 5,000 YEARS gold was a monetary asset, a financial asset, and a commodity," noted Jeffrey Christian of the CPM metals consultancy (.pdf) in New York last month. "Since the 1960s gold has been removed as a basis of the international monetary system."

But reviewing last week's news that China's Gold Hoard Rose 75% in the five years to end-2008, CPM now thinks it important that the 454-tonne purchase were initially made by the non-central bank State Administration of Foreign Exchange (SAFE), and only recently transferred to the People's Bank of China (PBOC).

"Investors will drive the next leg of this bull market in gold," said Philip Klapwijk, chairman of GFMS, at the London-based research consultancy's Gold Survey launch in Canary Wharf on Tuesday, "setting a new high above $1,000 in 2009 and with a real possibility of $1,100 per ounce."

Anyone pitching for $1,100 in short order, however, might have their work cut out for them. And all thanks to MC Hammer.

April Fools' Day came a day late to the gold market this week.

"The biggest interest-rate cuts in history," said Gordon Brown, summarizing the G20 summit of world leaders at its conclusion on Thursday.

A note doing the rounds here in London points to a very smart move by the Bank of England's pension fund.

Robert Winterton of Landesbank Baden-Wuerttemberg notes a 12% gain in the Bank's pension fund between Mar. 2007 and Mar. 2008 – the latest figures revealed by Freedom of Information filings – thanks to "great market timing.

Ben Bernanke says the United States has plunged into a deflationary depression.

Really, that's what his Fed announcement from last week made plain. His deflation-defying policies have clearly failed to date on Bernanke's own metrics. Because he's now moved to applying the cure instead.

A torrid tale of politics, gossip and a shiny, yellow threat to world peace...

Germany in 1944 could buy materials during the war only with gold. Fiat money in extremis is accepted by nobody...
- Alan Greenspan, then-Fed chairman, May 1999

Gold's previous bull market, ending with the sharp run-up to $850 per ounce in Jan. 1980 and rising more than 24 times over for dollar investors, came in the 1970s.

That decade gave us soaring inflation, too. So gold, or so everyone says, must deliver its strongest returns when the cost of living shoots higher. Right? Not quite.

Gold is not the ultimate inflation hedge. Nor is it often much use compared to stocks, bonds or real estate...

AFTER FALLING for 18 years as the 20th century reached its twilight, "the twilight of gold appeared to have arrived," wrote Niall Ferguson, now a Harvard professor, then an Oxford scholar, in 1998.

Of five central banks voting on interest rates this week, only the European Central Bank in Frankfurt failed to reduce its cost of money to record lows, holding rates steady at 2.0%.

The market's reaction? Forex traders trashed the Euro vs. those currencies now paying way less than inflation.

So far in 2009, gold and the US Dollar have both shot higher in tandem. Why...?

"A STRONGER DOLLAR typically weighs on gold," according to Reuters. But that's not what's been happening so far in 2009. Not by a long stretch.

Gold must hit $2,200 an ounce to match its real peak of Jan. 1980. Or so everyone thinks...

WHAT'S IN A NUMBER...? Ignoring the day-to-day noise, more than a handful of gold dealers and analysts reckon gold will hit $2,200 an ounce before this bull market is done.

Just what is the link between retail gold coin prices and the apparent manipulation of gold futures & options...?

You may have seen some rather wild commentary of late concerning gold and silver prices.