Having failed to react to the potent drivers of galloping inflation and serious geopolitical tensions, bullion is finally having its overdue moment in the golden sun.

The last time we looked, the US-denominated gold price was flirting with the $US2000 an ounce level, which is not far off the record peak of $US2039/oz attained a year ago.

In $A terms, the lustrous metal has already hit an all-time high, if only because of the strength of the $US.

The gold price is meant to be driven by the notion that, a store of value, it thrives in times of high inflation. But bullion also tends to move inversely to interest rates, which the central banks have been increasing to counter inflation.

Go figure.

Gold is also a safe harbour and has been rising on the prospect of more banking collapses, a recession, and/or a GFC-style financial meltdown.

Let’s settle for the Denis Denuto explanation: it’s all about the vibe and banking failures mean the vibe is visceral fear.

Should investors go for gold – and how?

Despite the heady $A price, the local miners have failed to hit the prosperity G-spot because of ratcheting input costs, notably for labour and energy. Some miners have disappointed for other operational or management reasons, or because they have been overleveraged.

But the gold bulls’ vibe is reflected in increasing M&A activity as the miners strive for expanded lower cost production to take advantage of the firming price.

US giant Newmont Corp last week lobbed an offer for the biggest ASX-listed producer, Newcrest Mining (ASX:NCM), while this week Ramelius Resources (ASX:RMS) said it would buy Breaker Resources (ASX:BRB) in an agreed $130 million scrip deal.

The idea is to meld the acquirer’s Rebecca project in WA with Breaker’s nearby Lake Roe.

While Breaker might be gobbled up, there are dozens of other ASX gold plays, so take your pick (and shovel).

Among the producers, broker Canaccord ranks the $1.7 billion market cap Capricorn Metals (ASX:CMM) as the “clear standout”, given its low per-ounce production costs.

Capricorn has its producing Karlawinda project in the Pilbara and is poised to announce a maiden reserve for its Mt Gibson growth project in the mid-West.

The firm expects emerging producer Bellevue Gold (ASX:BGL) to manage an average 181,000 ounces of gold per annum – and 200,000 over the first five years – from its eponymous project in WA’s northern goldfields.

With 3.1 million ounces of gold grading an average 9.9 grams a tonne, Bellevue is touted as one of the highest-grade gold development projects in the world. And Canaccord reckons it’s a takeover prospect.

When picking the golden ASX opportunities from the fool’s gold is all too much, pundits can opt for the simplicity of gold exchange (ETFs). These low-cost vehicles simply track the bullion price, without the risks posed by factors such as soaring costs and management stuff-ups. Investors also miss out on the leverage from good operational performance and the joy of their company finding a hot new deposit.

One example of the stay-in-the-armchair approach is Betashares’ currency-hedged gold bullion ETF (ASX:QAU) or Global X’s physical gold ETF (GOLD), which coincidentally turned 20 years old just yesterday.

Another option is to hedge one’s bets with Betashares global gold miners ETF (MNRS), which consists of 45 of the world’s greatest gold diggers outside of Anna Nicole Smith.

Intriguingly, Global X reports that while investors have poured into US and European gold ETFs, Australian gold ETFs have seen outflows. This implies that local punters are using the high gold price to take profits and add liquidity to their portfolios – yet another factor gold investors need to consider in the complex equation.

This story does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.