Wise men and gold investments
Wise men travelling from the east at this time of year can pick up some bargain gold on their journey - unless, that is, it's heading for another big tumble in price.
Those who bought gold as an investment last Christmas aren't looking so wise now.
The value per ounce has just headed southwards past the $1,200 per ounce level. A year ago, it was pushing towards $1,700.
Apart from investors, that makes it a tough call for jewellers, if they're flogging stock bought earlier this year.
Christmas is a vital time for their sales - not least for those last-minute purchases, in the hope that sparkly bling will make up for the absence of advance planning.
Cheaper gold brings jewellery into more people's price range. It's highly prized, of course. But as demonstrated by the decline, by one quarter, in the value of gold over the past year - the biggest fall in price since 1981 - this can be a highly volatile investment.Insecure assets
As I found out for this week's Business Scotland programme, that volatility is driven by several factors in the gold market.
One is that gold is an asset that benefits from other assets being insecure. With economic downturn bringing uncertainty in the currency, equity and bond markets, gold did well.
On 8 October 2008, as stock markets plunged, it was trading at $832 per ounce. Then came a big surge. On 25 July 2011, it peaked at $1,837.
Apart from fund managers chasing security, and speculating on gold's future prices, there are other factors affecting supply and demand, reflecting gold's uses beyond being a store of value.
The big driver, worldwide, is jewellery. According to the World Gold Council, around 171,000 tonnes of gold have ever been mined or panned. And because it doesn't corrode, they should still be around, somewhere.
While there's a gradual increase in supply from mines each year, last year saw 4,383 tonnes change hands.
Of that, 1,535 tonnes was bought for investment, including bullion and coins, though that's fallen steeply in each of the first three quarters of this year.
Central banks were in for a net increase of 544 tonnes during 2012. They hold nearly a fifth of all gold in vaults, ultimately as a means of defending their currencies.Gold smuggling
Jewellery, meanwhile, accounted for 1,896 tonnes. That element is increasing, as the emerging middle classes choose to hold wealth in gold, with significant increases in demand for each of the first three quarters of this year.
In India, in particular, there is a colossal market for gold, mostly for jewellery, while an astonishing amount finds its way into the vaults of Hindu temples.
But as most gold has to be imported, it can play havoc with India's balance of trade. That's why, this year, the Delhi government has sought to clamp down on imports. That's dampened the market, but also, perhaps predictably, it's sparked a lively trade in smuggled gold.
China's middle class is growing its demand for gold also, as well as the country overtaking South Africa as the biggest supplier of newly-mined gold. In 2011, China is reckoned to have produced 13% of the world's mined gold.
The other big area of demand is in technology. In the average smartphone, there's 0.02 to 0.03 grammes of gold, used in micro-chips for its conductivity, including the touch-screen function. That's one reason why re-cycling old phones can be lucrative, if it's done at scale.
Increasingly, gold's qualities are being deployed in nano-technology as well, from solar cells to anti-cancer drugs. Nano-technology patents for the use of gold have been growing sharply.
Put together, that's why the World Gold Council says electronics accounted for 284 tonnes of demand last year with 'other industrial' buying 84 tonnes. And let's not forget the declining demand for dentists, who last year used 39 tonnes worldwide.The Brown sell-off
Let's not forget also one of the less impressive investment decisions of modern times, when Gordon Brown sold 395 tonnes of Britain's gold reserves between 1999 and 2002, for an average price, at auction, of $275.
He wasn't the only European finance minister flogging the yellow stuff, which is one reason why the price remained so low.
It was seen to be of no use, with currency fluctuations less of a concern. This was a store of wealth that could be more helpfully deployed in assets that actually produce something, such as bonds.
However, as an investment, that Bank of England gold would now be worth more than four times as much - and that's at the end of a bad year for investors.