Time to buy gold (again)?

Now that gold has passed through the $1200 per oz barrier, people are talking about gold again. Should I buy gold, should I sell gold? Like any other investment, it all depends. The main reason people buy gold is as a hedge against inflation. Right now, inflation is still not a problem. So why has the price of gold jumped up lately? Well, the Euro is very weak right now and there has been tremendous volatility in the stock markets due to the problems in Europe, particularly Greece, Portugal, and Spain. Not too mention the so called "Flash Crash" that we had on May 6th. In addition, many people feel stocks had run up too fast and were due for a correction anyway. All this has people all over the world worried, and when doom and gloom prevails people buy gold. Like anything else, if everyone wants something that is in limited supply, the price is naturally going to go up. So some people are buying gold as a diversification tool in their portfolios. Not a bad idea, just don't go overboard. Here are a few key things to remember about gold as an investment. It doesn't pay income or dividends. Gold is strictly a capital appreciation play. What form are you going to buy it in? You can buy gold funds or ETF's which can be held in your investment portfolio, but if you buy gold coins or bars, you have to consider the storage costs and safety issues. Items placed in your safe deposit box at the local bank are not FDIC insured. So what are the alternatives? Many experts believe commodities in general, not just gold, are still in a bull market and have room for advancement. While we may not see inflationary pressures on interest rates anytime soon, the prices of commodities may continue to rise for a while. Silver, while similar to gold, is much cheaper than gold and has many other uses to people and industry than does gold. So what to do? Keep your options open, and if you do buy gold, don't go crazy. Most experts recommend 5 to 10% of your portfolio tops.