Should I invest in gold etf's?

The first question to ask is "should you invest in gold?" If the answer to that question is yes, then gold ETFs (IAU and GLD) are a convenient way to do so as the markets are liquid, the traidng costs minimal and the expenses of physically owning gold are too high for most investors. Now to answer the first question - how do you feel about the US dollar? Gold is generally considered to be an inflation hedge - inflation erodes the value of the dollar. The current environment is not considered inflationary but other factors may make a gold a good option for dollar-based investors over the next several years. The key factor is continuing confidence in the dollar. A large portion of foreign countries' foreign exchange reserves are held in dollar denominated assets. If foreign governments were to lose confidence in the US dollar as a store of value, they could sell their dollars. If enough governments came to that conclusion the sales coud turn into a dollar route. Today the government of Dubai announced that it would increase the share of Euros in its foreign reserves to 10% over the next year from 2% currently. The dollar position will be reduced to make room for the Euros.Also countries such as India and China have a low single digit percentage of their reserves in gold, compared to an average in the mid-teens for developed country. Were they to shift their asset allocation you would have a combination of dollar sales and gold puirchases. Conclusion - Gold ETFs are a good portfolio diversifier and it could be sensible to have 10% or so of your portfolio in gold ETFs. Of course, all of the above comes with the caveat that your personal financial situation could make the above comments irrelevant for you.