Now that gold is over $1000 an ounce, is it wise to invest in some gold or is it too high now to buy?

Reasons Why Gold Will Rise in 2008
1980 High

On January 21, 1980, gold closed at $825.50. Today, it takes $2,200.00 to buy what $825.50 bought in January 1980. Therefore, gold still has a long way to go before it reaches and surpasses its all-time high.
1. The Dollar Slide

Over the past five years, the dollar has lost 50% of its value versus the euro. Large institutions and central banks are moving their dollar-based assets into non-dollar-based assets. This is coming at a time when the U.S. economy is slowing to a crawl. In order to stop the U.S. economy from slipping into a recession, the Federal Reserve has no choice but to reduce interest rates in order to stimulate the economy. As rates decrease, the dollar collapses. As the dollar falls, investors are moving their dollar-based assets into assets such as gold 鈥?increasing demand and pushing the price even higher.
2. Flight to Quality

The sub-prime mortgage crisis was the catalyst that pushed gold to 28-year highs, and now we鈥檙e seeing investors make a flight to quality as fundamentals are supporting strong prices. In 2007, gold produced a return just below 30% while the S%26P 500 increased less than 8%. The uncertainty in the U.S. stock market, stemming from the sub-prime crisis, has caused investors to move their assets into stable assets. These assets, such as gold, have provided portfolios with much needed protection and, at the same time, have increased the value of portfolios at a rate of 4 to 1 over the stock market during the past few years.
3. Oil Versus Gold Ratio

Historically, the average oil/gold ratio has been around 15:1, meaning that the price of fifteen barrels of oils equals the price of one ounce of gold. That ratio has recently dropped to around 9:1. To return to average levels, the price of gold would have to increase to around $1400 (or there would have to be a drop of similar magnitude in the price of a barrel of oil). In the near future, $1400 gold is more likely than $50 per barrel oil.
4. Central Bank Sales and Purchases

Central bank sales which served to depress the price of gold throughout the 90s have come to a screeching halt, with most central banks having already liquidated their gold reserves to a bare minimum. Instead of selling, central banks are becoming buyers. For instance, China鈥檚 gold reserves account for only one percent of its total reserves. With those reserves piling up rapidly, it seems inevitable that China will diversify part of its foreign exchange reserves into gold.
5. Investment Demand

In recent years, there has been a tremendous increase in institutional demand for gold. In addition, although investment demand has been relatively muted in the U.S., there is plenty of demand from the flourishing middle classes in China and India and from central banks in countries that have enjoyed gains from foreign trade, such as Russia, the Persian Gulf oil producing states, and China.
The possible events that could drive down the gold price seem highly unlikely.

1. India could slow its consumption;
2. The U.S. stock market could boom, taking the attention away from gold;
3. Peace could break out in the world;
4. There could be a huge gold discovery;
5. Oil prices could collapse;
6. The dollar could rise.

6. Commodities Super-Cycle

We concur with the strategists at Citigroup, Deutsche Bank and Goldman Sachs who are among the new generation of 鈥渟uper-cycle鈥?proponents who believe that supply shortages in growing economies in China and India will send commodity prices and gold higher for another 15 to 20 years. The forces that have driven commodity prices higher in the past couple of years remain largely in place: global economic growth is strong; liquidity is plentiful and is increasing; and the demand for commodities will continue to grow in emerging Asia as the region industrializes and wealth grows.
7. Gold Mania

Mine production is falling at the same time that demand is rising. Worldwide investment demand for gold will remain at historically high levels, significantly exceeding 40 million ounces. Don鈥檛 rule out the possibility of a full-blooded mania in gold within the next couple of years, particularly given the fact that the flight from the dollar is picking up speed and momentum

you should have bought gold last year when it was rising like crazy, $500-700. Price will probably still go up but your profit wont be that high still gold is always a good investment, but now is a good time to consider when to sell.

Don't buy at the top, you were too late to the game. Always look at investments this way: what is your upside potential compared to downside risk. In gold, upside potential is small, with risk substantially high.

Look at other metals like copper, zinc, etc...

Hindsight is always 20/20. If you think the Fed can not solve this crisis... then yes buy it on the dip. However, if the Fed is able to stablize the credit situation then gold will retrace perhaps back to 500-600 range(all within 1 to 2 years).

When I bought some at $350 knowing it was only $250 a few years ago... I was not sure either but House prices was crazy at that time and stock was still not stablized. I thought it was a right thing to do. moral of the story is... look around you and see if there is anything else that is cheap and buy what is cheap and not what everybody else buys.

With all that said, YOUR GUESS IS AS GOOD AS ANY BODY.

Use your senses and feel the force, Luke!