For decades, gold has been considered an asset one either speculated upon or invested in as textbook, defensive asset allocation. However, as a result of either complacency toward diversification or the view that it is speculative, the market is under-invested in gold. Despite the huge success of the largest of the gold bullion ETFs SPDR Gold Shares, (GLD), for example remains tiny in the grand scheme of stock investing. It is only worth 0.4% of the S&P 500's market cap, and a smaller fraction still of the entire stock markets' capitalization, as of the end of October.
Read the whole article here: Gold: Investment or Speculation?, GlobeAdvisor.com, December 17, 2009