This NYT article
reviews the gold investment craze and looks at both the pros and cons of investing in gold. It's one of the better articles on this topic IMHO. Here are some excerpts on both sides of the issue:
If governments print more money to pay off their debts, the logic goes, inflation will destroy the value of the dollar, the euro and other paper currencies - thus enhancing the value of gold.
Still, gold can go down - sometimes sharply. After peaking in 1980 at more than $800 an ounce, gold sank over the next two decades, bottoming out at just over $250 an ounce in 1999.