The historic reputation of gold was founded on the very stability of its price. It was the benchmark par excellence against which other prices were compared. Today, it is a different story. Over the past decade or so, we have seen gold price surged to its zenith of $850 an ounce in 1980 and then tumbling down to as low as under $300. The wide spectrum of gold prices over time offers an opportunity for investors. What motivates the writing of this report is the potential, we see, in this long- neglected area of investment. We must admit that over the past few years, the price of gold has been in its doldrums and has seemingly been contained within a narrow band of prices. Unlike most other investments, gold hoarding not only does not reap annual returns in the form of dividends or interests (with the exception of gold shares and the like), it instead entails the incurrence of an annual maintenance fee for storage, insurance and other expenses. Thus most investors shun the yellow metal. Early last year (1993), a Swiss banker was heard saying that not a single Swiss portfolio manager had recommended gold as an investment for the New Year. However, we believe the scene is set for a change. With interest rates in many developed countries at their historic low, currency markets struggling to find their rightful place, and as a new World order of wars and threat of wars begins to unveil itself beneath a facade of peace, the glitter is slowly returning to gold. The objectives of this report are twofold: First, to create an understanding and an interest in gold investment (which we find lacking among domestic investors) and; second, to provide some foresight and advice pertaining to gold investment, primarily on the long-term basis and also, to a smaller extent, satisfy the need of the short-term speculators by devoting one chapter to common gold pricing models. The reason why we do not commit more than one chapter of our report to such models is our doubts over the applicability of these pricing models across time and the myriad of diverse situations. Moreover, if such a comprehensive model does exist, it is questionable anyone would pen it in the first place.