Bullion pays no income and, after storage costs, can be seen to have a negative yield but it has delivered much better returns than shares during the last decade – and has a history of doing particularly well in election years.

While the FTSE 100 remains below its level 10 years ago, the sterling price of gold has soared by more than 320 per cent to £745 at which individual investors can buy today. That is lower than the record of £754 it hit earlier this month but gold bugs claim there are good reasons to expect a recovery.

Adrian Ash, head of research at BullionVault, said: “This week’s inflation figures show that savers in bank deposits have been hammered.

“With the Retail Prices Index (RPI) rising at 4.4 per cent in the year to March and Bank of England base rate frozen at 0.5 per cent – and many bank accounts paying less than that – cash savers have lost nearly 4p in the pound during the last year in terms of reduced purchasing power.

“People say that today’s low interest and inflation rates mean things are not so bad for savers as they were 30 years ago. But the net outcome is the same.

“In 1980, base rates were at 17 per cent and the cost of living was rising at 21 per cent. Just like in those bad old days, cash savers today are losing 4 per cent a year.”

Buying jewellery as an investment is a waste of money because of massive price differences at which it can be bought and sold. Baird & Co, Goldmadesimple and BullionVault are among dealers seeking to meet new demand from individual investors.

Baird will sell investment bars as small as 2.5 grams for £77.75 each or one ounce gold Tigers in presentation boxes at £799.50. BullionVault offers to sell gold online at £23.16 per gram, some £744.56 per ounce. Its dealing commission is 0.8 per cent on purchases and sales up to $30,000 giving a 1.6 per cent offer-to-bid spread. Storage fees are 0.12 per cent per annum.

Uncertainty created by general elections appears to boost the sterling price of gold. During the year after the last election in May, 2005, the bullion price increased by 62 per cent.

That was its biggest ballot year rise since Margaret Thatcher’s first election victory in May, 1979, when the gold price soared by 89 per cent.

While the price fell by 10 per cent and 12 per cent respectively during the election years of 1987 and 1997, bullion’s average one-year gain over all national ballots since 1970 has been 18 per cent.

While history is not a guide to the future, those who fear a hung Parliament may draw some comfort from the fact that gold even staged a modest increase of 6 per cent after the last indecisive election in February, 1974.