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"Probably the only real surprise about the surge in gold prices over the past few months is that it took so long to arrive," says the Economic Times of India. "Last week, gold touched an all-time high of $1,227.50. Back in September, it was still less than $1,000. Chalk that up as a victory for the gold bugs."

Considering that India the top gold consumer in the world, this is bad news for its buyers, good news for gold sellers.

This second week in December, the price is dropping, heading below $1200. Gold skeptics are glad; they point out that the metal's value is nothing more than a memory from a long-forgotten era.

In reality, however, while investors are justified to be antsy about inflation, maybe they're catching on that it's not a good idea to see gold as the best defense against a general rise in prices. There are plenty of alternatives that are just as good or better, including equities, property, oil, luxuries or private equity funds. All of these could prove to be just as effective a way of shielding yourself from price increases.

"It isn't hard to figure out why investors had been getting interested in gold again," says Bloomberg via the Economic Times of India. "Central banks are pumping freshly minted money into the system. A few hundred years of economic history says that eventually this will lead to inflation. It might be next year, or the year after."

Whether you think it's a good hedge against inflation depends on where you want to start looking at the numbers. In 2002, gold was worth less than $300. If you bought it in 2002, you'd certainly have protected yourself against rising prices. The 1990s are a different story. Gold started at around $400, and ended the decade below $300. Gold lost nearly half its value in the 1980's, so forget about them.

"There isn't much chance, either, of the world's central banks making their currencies convertible into gold once again," states the article. "They would bankrupt their governments in the process. In truth, while gold may have a role in protecting against inflation, there are plenty of alternatives. "

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