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Are you a gold bug? Or have those gains grown tarnished?

BUY Is gold a bubble today at €1,000/oz? Legendary investors who foresaw this economic crisis, such as Jim Rogers, John Paulson, Peter Schiff and Marc Faber, say that gold will go to thousands of dollars per ounce in the coming years. All own and/or recommend gold as part of a diversified portfolio.

Value investor Anthony Bolton, Britain's Warren Buffett, said last month that because gold was a currency, it was the only commodity to own today. Recently, George Soros said that "the current conditions of actual deflationary pressures and fear of inflation is pretty ideal for gold to rise". His firm's most recent quarterly filings show his biggest buy was gold worth $64m (€47m).

"Not owning gold is a form of insanity", one of the top investment strategists in the world, Cazenove Capital's highly respected Robin Griffiths, told CNBC recently.

Barclays Capital in London forecasts gold will average $1,500/oz in 2011 (from $1,364/oz). "A clouded macro environment against a backdrop of low interest rates, growing uncertainty surrounding currency debasement and medium-term inflation fears continue to stoke investor's appetite for a portfolio diversifier and a safe haven," wrote Barclays Capital's analyst.

People and central banks internationally are diversifying into gold, which is leading to illiquidity in the very small gold bullion market. All of the gold in the world if refined into bullion (0.9999 pure) would fit into a 21-metre cube on Wimbledon centre court.

Ireland's membership of the euro and the future of the euro itself is uncertain. This poses risks to the value of equities, deposits, prize bonds, bonds and all assets denominated in the 'single currency'.

Given the variety of macroeconomic, monetary and geopolitical risks today, owning a low cost, diversified portfolio passively which includes cash, gold, international equities, international bonds (short dated; high credit) has never been more important.

In Ireland, gold's importance to a diversified portfolio has been written about by Jim Power, Eddie Hobbs, Brian Lucy and Constantin Gurdgiev. They recently completed a paper on gold, which was presented at a conference hosted by the Bank for International Settlements, the ECB and the World Bank.

Hedges and Safe Havens -- An Examination of Stocks, Bonds, Oil, Gold and the Dollar clearly showed gold's importance as a long-term diversification.