As has happened in the past, when I do the research for a particular blog, I find material containing the information that I had planned to present that is better than I would have been written myself.
For example, read The Gold Price – A “Spike” Or Something Else? By: Julian D. W. Phillips, Gold Forecaster for extensive coverage of the question.
And then listen to this interview.
One of my main points is to compare the 1980 "spike" at $850 to today's $715 for gold. Remember, you have to adjust for the shrinking dollar.
From another analysis:
"Now let’s take a look at where we are with gold and its previous historic high. The high reached in gold was $850 an ounce seen in January 1980. Adjusted for inflation, that would correspond to $2088.90 for an ounce of gold today!
Gold in 1980 $850.00
In 2006 Dollars $2088.90
Let’s look at it from a reverse perspective. The recent (05/11/06) price of gold is $715.10 an ounce, which would correspond to $290.98 an ounce in 1980 adjusted dollars, nearly 66% below its previous peak.
Gold on 05/11/06 $715.10
In 1980 Dollars $290.98
If you listen to the interview, you'll might want to follow the advice given there... JUMP IN WITH BOTH FEET!!