But is it right for your investment portfolio?
Bullion is acquired in small bars or coins, and investors seem to be enamored with the shiny metal.
Bullion purchases by individuals nearly doubled last year, to 862 metric tons.
In fact, the U.S. Mint, the federal agency that manufactures gold coins for the nation, has had to step up its production this year, with coin sales through June just shy of the 794,000 sold in all of 2008.
But many financial advisers are wary of owning bullion. Why?
First, safekeeping is a risk.
Second, bullion is hard to use.
If the world falls into chaos, you can’t easily chip off a piece of your gold bar to buy, say, milk.
Third, gold can rise and fall in value like any other investment.
Finally, unlike stocks and bonds, gold pays no interest or dividends.
Instead of buying bullion, some investors might want to consider putting around 10% of their portfolios into gold-related investments.
These might include mutual funds that invest in gold-mining stocks or exchange-traded funds that invest in physical gold.
In the end, the decision must be based on your individual circumstances. It is said that "Gold takes the stairs up and the Elevator down...". That may be just a saying, just realize the risk.