Gold Has Got Its Groove Back

How dare any of you second guess the gold bugs. From a day’s low of $1,168 per ounce, the yellow metal rallied to a day’s high of $1,186. Our precioussss is back on a tear, maybe.

Gold is still, however, down 5% for the month — whereas copper is actually up 12% during the same period.

Don’t go trading in your gold Krugerrands for copper bullion bars any time soon, though: gold is still a rockstar investment.

I know, I know — your equities cheerleader friends will remind you that “gold is not an investment.”

It just preserves your purchasing power and gains in value over time… Who would want that kind of trash as an investment?

As one of my fellow writers reported on Wall Street Memo earlier today, the run-up in gold prices could just be getting started. From an average of approximately $35 in 1970, gold went up to more than $800 an ounce by 1980. But who wants that? That doesn’t sound like an investment to me.

Here’s the thing: I wouldn’t mind if you all stayed away from gold and the miners for a bit longer. Give those of us who know what’s up a few more months to load up.

And no, I don’t believe gold is “always” a good investment. During the tech boom, you would be an idiot to have all of your money in the form of heavy little coins when you could have made a killing on, well, just about anything traded on the Nasdaq.

But there is a time for gold as well, and to ignore those windows of opportunity is equally foolish. Clearly 1970 to 1980 was that time. And perhaps 2010 to 2020 will prove just as rewarding.

It’s not often I agree with Glenn Beck’s chalkboard, but I do know this: you need some gold in your portfolio. If you are absolutely obsessed with metals, you can even hedge your gold bet by loading up on base metals as well — if the global economy takes off, demand for copper and zinc will increase. Check out the Powershares DB Base Metals Fund (NYSE: DBB).

Disclosure: Long on gold and silver.

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