Cautionary Note From The Chicago Tribune

Taking the recent drop as a cue, the Chicago Tribune's Gail MarksJarvis points out the dangers of plunging into an asset class without knowing what moves its price: "Gold no investment safety net." This point was particularly eye-opening:

What's disturbing is that this frenzy seems to have had a special appeal for seniors. Richard "Mac" Hisey, president of AARP Financial Inc., said that seniors have been calling for help finding gold. One woman, who was worried about living on CD income, wanted to know if she should use her credit cards to stock up on gold.

She was warned not to do it. If she did use her cards, she now owes more than her gold is worth.

Ms. MarksJarvis quotes Jim Paulsen, chief investment strategist for Wells Capital Management, as saying that gold is overvalued relative to the entire CRB index.