It seems that investors are being bombarded by the new "gold rush" from all quarters. You can get "buy gold" advice on TV from a former head of the U.S. Mint as well as from a former key figure in the Watergate break in.

Gurus, swayed by the recent soaring gold prices, are convinced the boom hasn't peaked. They cite a weak dollar and possible new inflation as more reasons to buy gold. Also recently a well know investor put his investment dollars in gold. John Paulson, notified investors that he is starting  up a fund dedicated to buying up shares of gold miners and other bullion-related investments. Paulson realized about $20 billion of profits for his hedge fund between 2007 and early 2009 betting against the housing market.

Paulson & Co. already is a major holder of gold shares. Mr. Paulson currently has more than 10% of his $30 billion or so under management in gold-related investments, according to his investors. What's more, he owns billions of dollars of gold exchange-traded funds, according to the Wall Street Journal. "These gold investments have benefited from the recent surge in gold prices to nearly $1150 an ounce."

For most investors, care should be exercised in not getting swept away by all the gold hype, for several reasons.

• Many forecasters do not believe that high inflation is in the cards, at least not in the near term. That removes one major reason for purchasing gold.
• Also, gold tends to prosper when the markets are highly volatile. Recently, markets have calmed.
• Much of the spike in gold prices is being fueled by investor demand in China and India. There is reason to believe that this demand may weaken as the global economy gets back on track.

Many advisors see room for moderate amounts of gold in a portfolio but urge caution. Said one investor: "For those who don't currently have assets tied to gold and have resources to invest, given the uncertainty of the current times it's rational to start to gradually cultivate a gold related position in conjunction with building other investments. But in my view those who assume that they'll turn a big short-term profit at current gold price levels risk being disappointed."