The current surge in the price of gold is the definition of a "bubble."

Of all investment assets perhaps gold has the largest component of psychology "baked" into the price.

Commercial and industrial uses of goal are limited. The demand for jewelry and dental crowns falls in a recession just like every "elective" expense. The price of gold should go down.

It goes up because buyers want and psychologically need for it to rise. When "things settle down" and the economy returns to a normal supply/demand equation the price of gold will fall perhaps even faster than it has risen.

When buyer demand is the principal force behind the price of an asset and supply is not limited... It is a "bubble" waiting to burst.

Preston F. Sanders is a Chartered Financial Consultant and Registered Investment Advisor. He lives in Washington, Georgia, and can be reached at prestonsanders@bellsouth.net.

NOTE: Any investment can lose value. Don't buy any stock without a careful evaluation of it's appropriateness for your situation. See your financial/investment advisor.