As Jason Hollands, managing director of Bestinvest puts it, beyond jewellery, gold has a relatively limited use “but our perception of it as valuable is a deep-seated, cultural one”.

By their very nature, precious metals are difficult to place a value on, compared to equities, for example. Mr Hollands says: “That’s one of the things that many investors and advisers struggle with when it comes to gold. While shares can be valued based on their profits or the attractiveness of their yield, the price of a lump of metal of limited real-world utility is hard to value on a fundamental basis.”

But this has not generally deterred investors from holding gold and other precious metals within an investment portfolio.

Investors can access precious metals through open-ended vehicles and a small number of investment trusts, with many natural resources and mining funds offering exposure to gold and other metals either directly or through mining and production companies. Investors can also gain exposure to gold through exchange-traded products (ETPs), which are gradually becoming a more mainstream way of accessing the asset.

Tom Elliott, international investment strategist at deVere Group, argues that there is a place for real assets, including precious metals, in an investment portfolio and advises a small exposure of up to 4 per cent.

He observes: “Real assets always have a valuable diversification role in an investment portfolio, and rising geopolitical risk may yet trump the factors that keep prices stable.

“Modern portfolio theory demonstrates that there is good reason for holding real assets.”

That is not to say that metals such as gold, silver, platinum and palladium have had an easy time of it of late. The price of gold has reached new lows this year and a strengthening US dollar offers little incentive for investors to jump back into this precious metal.

The low interest rates and monetary policy divergence among central banks have prompted investors to consider where they might find income, as opposed to seeking solace in gold and precious metals.

The second-quarter figures from the World Gold Council show that, in value terms, demand for gold in the period was $40bn, down 24 per cent compared to the same period a year earlier. The average gold price of $1,288 per ounce was down 9 per cent on the average price in the second quarter of 2013.

Marcus Grubb, managing director of investment strategy at the World Gold Council, adds: “In the context of an exceptional year last year, where we saw record consumer buying and investor sell-offs, this [second] quarter’s demand continues to demonstrate a return to long-term trends, illustrating the uniquely balanced nature of the gold market.”

Precious metals may be out of favour but there could still be a place for the asset class in a long-term investment portfolio.

Ellie Duncan is deputy features editor at Investment Adviser