Gold

Robert Zoellick, president of the World Bank, has said that gold is the “elephant in the G20 meeting room” and has suggested that the metal should be given a role in any fundamental reshaping of the global monetary system which may emerge from current international discussions. Although this was initially interpreted as a call for a return to the gold standard, Mr Zoellick on Wednesday said that this would be impractical. Instead, he seems to believe that gold should act as a kind of signalling mechanism, which flashes warning signs when uncertainty is rising, and confidence is falling, in the global economy. Maybe, but I am struggling to understand how this could be made to work in practice.