Gold's price is rising. Why? There may not be much left to mine.

You may have received an email/spam touting the wonderful investment opportunity that gold provides. Some investors think that gold is a good hedge against inflation (it really isn't any more). Some people think that gold is one of the worst investments, as it fluctuates often and has a poor record of return in comparison with the S&P 500. An article in the Economist points out that gold has underperformed even inflation of the US Dollar (meaning if you have bought gold in the past, you have actually lost money, as the value of what a dollar could buy drops).

This article in the Independent talks about gold mining and how at this point and technology level, mining companies can barely get an ounce from 30 tons of ore. The price of gold, the article speculates, is primarily driven by increasing demand for jewelry around the world, but also in developing countries like India and China. Does this mean that the price of gold will increase even further? It might, especially if environmental regulators begin to crack down on the use of cyanide in mining.

So should you invest in gold? Keep an eye on demand. If countries like China continue to want more and the supply increasingly becomes depleted, then naturally, like any commodity, the price will rise. You may make some money, but there are also better ways.