hr: Money

Don’t look now but the price of gold is back above $900 an ounce.

Gold, which typically rises during times of economic uncertainty and inflation, hit an all-time high of more than $1,030 an ounce back in mid-March.

A week ago, gold futures were trading at $866 an ounce. There is a case to be made that gold prices will continue to rise modestly. Demand for gold is still strong in many emerging markets. As such, profits for many gold miners are expected to double this year.

Still, most financial planners and market strategists say that people should only have a very small percentage of their portfolio dedicated to gold. Gold prices are up nearly 9% year-to-date. Not surprisingly then, gold stocks, mutual funds and ETFs have been some of the market’s better performers during this tumultuous year on Wall Street.

According to fund tracker Morningstar, precious metals funds are up 1% year-to-date compared to a 8.5% loss for the S&P 500. Keep in mind, when gold hit its all-time high, the overall market was in a panic about whether Bear Stearns would collapse.

“There is a wide pricing disparity between gold and oil but I think that will narrow with crude coming down, not gold catching up.”

In addition, Walter said that although global demand is still strong for gold, there are concerns that China’s economy may be starting to slow a bit. That could dampen gold prices.

It still owns several though, including Newmont Mining and Freeport McMoRan Copper & Gold.

So even though investing in gold and gold mining stocks may be a good idea for a long-term portfolio, now’s not the time to go overboard and make too a big bet on all that glitters.