I’ve been a gold bull since late 2005 when it was about $450 an ounce.  Now with gold pushing $2000, that proves to be a good investment considering the market turmoil since.  But what about now?  Is it the time for an entry position in gold??

 

As you can see, an investment in gold (or GLD, my preferred ETF) 5 years ago gives you a very nice return today.  The S&P 500 is still negative, however.

The chart below illustrates this

Gold vs S&P 500
After briefly touching $2,000 an ounce, gold has pulled back (a little) to around $1,750.   I like this price as a entry point for anyone thinking about starting a position.  Even a 5% portfolio allocation is a good start with GLD.  This can be used as a hedge against inflation or a spreading crisis in Europe.  If stocks do well in 2012, gold will probably lag a bit.  If that’s the case, buy more next year.  In any case, gold isn’t going back down to $1000 an ounce.

**Disclosure – I have no positions in physical gold or GLD at the time of this article.