The other day at my shopping centre there was a young woman perched behind a makeshift desk asking people if they had any old bits and pieces of gold or gold jewellery that were surplus to requirements.

The gist of the message was: With the price of gold booming you could be sitting on a small fortune.

"Exchange your unwanted, damaged, outdated and worn gold for CASH!"

The flyer in the form of a glossy $50 note goes on: "Our consultants will test and value your gold items. We will give you CASH on the spot!".

So, here it is 2010 and everyone wants gold. It's a funny old world; it wasn't that long ago gold was on the nose, especially in Australia.

In the late 1990s gold was considered by Australia's economic movers and shakers as old hat, soiled goods. We were told our sophisticated financial system had moved on.

Well we all know where the system ended up - in the GFC without a paddle. Had you invested in some shiny stuff you would be well rewarded by now. This week the price of gold jumped by more than $19. It's sitting somewhere around $US1115.00 an ounce.

In November 1997 the then Treasurer, Peter Costello, shocked some people when he announced he'd signed off on the sale of $2 billion worth of Australian bullion. On the day he announced the sale the price was around $US306.00 an ounce. At the time, according to Mr Costello, gold "no longer plays a significant role in the international financial system".

Three days after the bullion was sold Australian gold shares slumped 16 per cent. With gold languishing there were more than a few people within government and the Reserve Bank congratulating themselves on such a prescient sell off.

But no-one else seemed to be selling, certainly not the US, and Robert Champion de Crespigny at the time expressed concern about Australia's ambitious move. The then executive chairman of Normandy Mining, Australia's largest gold mining group said:

"I think the Reserve bank has handled this extremely clumsily". Gold, he said, had a future if you took a long term view.

So here it was 1997 and Australia had sold two thirds of its gold assets in a single day, and sold into a buyer's market.

While the sale helped pay down debts, the deal was to cost Australia billions of dollars in the long run. But at the time people were lining up to congratulate the Treasurer.

Bill Shields who was with the Reserve Bank and who went on to become Macquarie Bank's chief economist seemed to echo the Federal Treasurer's words. He said he thought the gold price would remain under pressure and depending on how supply responded it could fall lower.

Gold, he said "no longer has a role in the monetary system and with low inflation it is an unattractive investment relative to interest bearing securities and equities".

While that sentiment was certainly shared in the plush offices of bankers in Australia, it wasn't on the minds of China's money men and women.

Two years after Australia's Government sold off two thirds of the nation's bullion, China made a startling admission. Over six years it had quietly bought 454 tonnes of gold (presumably some of it was Australia's).

The gold price fell sharply in 1999, down to $US251.70, mainly on concerns that central banks were reducing gold bullion reserves. But by the end of that same year gold had rebounded and was fetching US$338 an ounce. Since then it has gone up steadily.

This week it reached beyond $US1134.00. That's nearly three and a half times the price when Australia flogged two thirds of the farm.

At that price I'm thinking seriously about that old gold crown at the back of my mouth.

But let me say as a journalist I make a lousy investment advisor, although I can say with some confidence I wish my superfund had bought some of Peter's gold in 1997.

So where to now? With the US economy chugging along and fears of another correction, the greenback is seen as no safe haven. And what about the US debt? Add to that the sheer amount of paper currency being printed and the old gold coins are looking good. Europe is in a worst state with Greece, Portugal and Spain in all sorts of economic bother.

As a result confidence in the euro has fallen and it has taken a flogging on world currency markets.