Many of the most cherished hopes of gold bugs have come true in the past few months — but not, alas, the only one that matters to them in the end: a sharp rise in the price to bring it back into record-breaking territory.

The Comex front-month futures contract for gold peaked just shy of $1,800 an ounce in early October before dropping again, defying bulls’ hopes that it would rise above the 2011 peak of $1,912. In Monday’s New York lunchtime trading it was $1,730. Should its flat recent performance make institutional investors wary of its luster in the future?

The run of favorable news for gold bugs began in August when Mario Draghi, president of the European Central Bank (ECB), stoked inflationary fears by outlining his outright monetary transactions program to buy the sovereign bonds of troubled member states where necessary. Federal Reserve chairman Ben Bernanke’s September announcement of a third round of quantitative easing (QE3) — an injection of another $40 billion into the economy each month — added inflationary pressure to the U.S. economy.

The reelection of Barack Obama as U.S. president on November 6 provided further impetus for gold, by increasing the chances that Bernanke can continue with ultra-loose monetary policy for longer. Mitt Romney, the Republican challenger and a monetary-policy hawk in comparison with Obama, was set to replace Bernanke with an inflation hawk after the chairman’s term in office expired in January 2014.

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