Gold Rush by Many Investors Could Push Price Up to $1,200

Investors wary of other investment choices are taking physical possession of gold in a move that could drive the metal to historic heights.

Gold prices could make a run at $1,200 and beyond this year as investors look for safe places to put their money amid continued turmoil not only in the economy but also the stock market and the US political structure.

"When you have such a large part of US population convinced we're running to hell in a handbasket with federal spending, you're going to have a large part of the population buying and taking possession of gold out of fear of what's going on," says Jim DiGeorgia, commodities analyst for Gold and Energy Advisor.

Investors can buy gold in a variety of ways—through futures contracts, mutual funds, exchange-traded funds, as well as actual ownership.

Owning gold [US@GC.1 985.5 -10.30 (-1.03%) ] is primarily done through purchases of gold bars, which can be stored in safe deposit boxes in banks. Other investors can buy solid-gold coins or even use jewelry as an investment. Gold bars, though, are generally considered the best investment because they can be bought at retail prices instead of the markups that other gold investments carry.

"I would recommend the average investor, if they want to get into hard assets, put 3 percent to 5 percent of their money in gold and hope they never have to use it," says Burton Rothberg, a former senior trader with Commodities Corporation, who has invested in the gold markets for decades.
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