For the past 5,000 years - long before the emergence of money - gold has enjoyed a mystique virtually unsurpassed by any other physical substance. The people of antiquity used gold to fashion the things they cherished most, both secular and religious. When it the time came for money to replace barter, gold's beauty, solidity and scarcity made it the medium of choice.

Investing in gold is nothing new - in fact, itapos;s being going on for hundreds of years. The gold market is like every other in being vulnerable to speculative ups-and-downs, but it has always shown astounding resilience in the face of economic and social stresses, leading to its current status as a prized investment tool. And it is one that has unique relevance now. There is every reason to be concerned about the value of the dollar at the moment. After all, last yearapos;s duel in Congress over the budget almost resulted in a historic defaulting on the national debt and led to Standard and Poorapos;s downgrading of US credit. And whatever side you are on in the debate over government spending, you probably agree that it contributes to inflation.

You should also be aware that the value of paper currency is basically a figment of the imagination. Whenever you pay for anything, you act on the assumption that the US Treasury can back up the value of the dollars you use - which comes down to an act of faith. This state of affairs can be traced back to 1973 - the year the US officially got off the Gold Standard, which meant that a dollar could no longer be exchanged for its value in gold. Abandoning the gold standard turned out to be a mixed bag - it did generate increased economic growth and more opportunity, but at the risk of increased inflation.

Gold is a tangible thing with a proven ability to withstand erosion of value over time. We all know that the price of almost everything has arisen astronomically over the last few decades. In contrast, the amount of gold required to purchase a barrel of crude oil remains close to what it was a half century ago. For the last decade, without exception, gold prices have consistently risen against the US dollar and foreign currencies; 2010 alone saw gold rise 29.8% against the U.S dollar. This trend is expected to continue, both in the US and internationally.

The emerging nations are showing unmistakable signs of interest in gold and international central banks have been purchasing it for their reserves instead of cash. And investors around the world believe that the demand for gold will rise for at least the next few years and recommend that at least 10% of your portfolio consist of gold.

Clearly, now is the time to diversify your portfolio. In addition, silver is showing promise and should be added to your portfolio. We will talk about that somewhere else.