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Gold Rush: Investors Play It Safe

Wednesday, June 29, 2011 - 8:53 AM
From Bankrate.com
You know an investment is hot when people are going on the radio and asking you to melt down your jewelry so they can get in on the action.

Gold has been on a bull run over the last decade. In May 2001, the price of gold averaged $272.36 per ounce. On May 18, 2011, it closed at $1,496.50 per ounce, an increase of nearly 450 percent.

But what's behind those gains is a more complex question, says Tom Winmill, portfolio manager for Midas Funds in Indianapolis. That's because gold performs two distinctly different functions. It's a commodity and a hedge against inflation, and its importance in both roles has grown significantly in the last 10 years.

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