If so, join the crowd. "People are bringing in stuff their mother gave them, stuff they're not wearing, broken chains, broken rings, and walking out with $900, $1,000," says Richard Rozhko, owner of Howard Jewelry in Chicago. Silver, too. "They're bringing in knives, forks, spoons," Rozhko says.

It's no wonder. Gold briefly traded above $1,000 an ounce Thursday for the first time ever. And silver — often called the poor man's gold — has been soaring, too.

If you're hankering to buy gold, you may get a chance to buy it more cheaply in the next month or so. Gold bullion has soared 52% over the past 12 months and 19% this year — and it may have gotten ahead of itself. But if you want to invest for the long run in gold — which can have a role in a diversified portfolio — you have three good options: gold bullion coins, gold exchange-traded funds and gold mutual funds.

Gold closed at $992.30 Thursday after briefly cracking the $1,000 barrier. These factors are pushing up gold prices:

•Supply and demand. Demand for gold rose 4% in 2007, while supply fell 3%, according to the World Gold Council. Finding new gold fields is difficult; opening a new mine is even more so, because of environmental concerns.

•Inflation. Gold is a traditional inflation hedge; investors bid up its price when the inflation rate starts to rise, which it has. The consumer price index, one measure of inflation, rose 4.3% for the 12 months that ended in January but at a 6.8% annual rate in just the last three months of that period.

•The dollar. "Gold is the mirror image of the dollar," says George Milling-Stanley, manager of investment and market intelligence at the World Gold Council. Gold's price rises when the dollar falls. The dollar hit an all-time low against the euro Thursday and fell below 100 yen for the first time since 1995 before closing at 102.04.

•Oil. Soaring energy prices can fuel inflation, and gold rises 90% of the time when oil does, says Frank Holmes, CEO of U.S. Global Investors. Oil soared above $110 a barrel Thursday, a record.

Still, gold may have come too far, too fast, Holmes says. Gold prices correlate closely with oil and move in the opposite direction of the dollar.

"According to our models, the dollar is overextended on the down side, and oil is overextended on the up side," Holmes says. That's why he's looking for a short-term correction in gold prices.

James DiGeorgia, editor of website Gold and Energy Advisor, says he thinks that gold could hit $2,500. He's concerned that the federal government's deficit spending is hurting the value of the dollar. And the Federal Reserve is pumping money into the system to keep the economy from falling into recession; that's potentially inflationary, too. "It's a huge mess, and it's all the politicians to blame," DiGeorgia says.

Ultimately, the gold rally will end whenever the government jacks up interest rates and squashes inflation, potentially igniting a recession. Until then, DiGeorgia thinks, gold has room to run.

Let's say you're interested in buying gold. You could invest in gold futures, which are contracts to buy gold at a certain price at a certain date. Most small investors, though, would have more fun with their money by setting fire to it and dancing around it naked. Small investors in the futures markets tend to lose early and often.

A more practical way would be to buy gold bullion coins. The advantage: They don't need to be assayed for gold content and purity, and they're easily portable. (A London good delivery bar, the kind you see in movies, weighs 400 troy ounces, or 27.4 pounds.)

U.S. gold Eagles are a popular choice; they're 22-karat gold and easy to buy. (The American Buffalo one-ounce coin is 24 carats.)

If you can't afford a one-ounce gold coin, you can buy Eagles in weights of a tenth of an ounce, a quarter ounce and half an ounce.

"It's not as big a sticker shock," says David Beahm, vice president of economic research at Blanchard & Co., a New Orleans-based gold dealer.

You'll pay a bit extra for the government's seal of approval. Eagles typically sell for 3% to 6% more than the spot price of gold.

Take physical delivery of your gold. You really don't want someone else to hold it for you. Store your coins in a bank safe-deposit box, because gold coins are, well, very portable. If you don't trust banks, you'll have to work out a way to protect your coins from theft, preferably some way that doesn't involve digging holes in the dead of night.

Silver fans can also buy U.S. silver Eagles or bags of pre-1965 silver coins. A bag of $1,000 in face-value silver coins weighs 55 pounds, so be sure to stretch before hauling them home.

Avoid rare coins, unless you really want to start a rare-coin collection. Much of the value of rare coins derives from their scarcity and condition.

Another good way to invest is through gold exchange-traded funds. These funds buy gold bullion; one share is worth one-tenth of an ounce of gold. StreetTracks Gold Shares (GLD) and iShares Comex Gold Trust (IAU) are the two largest gold ETFs.

Finally, you might consider gold mutual funds, which invest in shares of gold-mining companies. Returns from these funds have actually lagged behind the returns from gold bullion, in part because they invest in stocks — and the stock market hasn't been a pleasant place to be recently. Furthermore, some analysts fret that mining companies will have a hard time growing their earnings by finding more gold.

In any event, don't get burned by gold fever. "You don't buy gold to get rich," says U.S. Global's Holmes. "You buy it as protection against declines in the value of the dollar."

John Waggoner is a personal finance columnist for USA TODAY. His Investing column appears Fridays. Click here for an index of Investing columns. His e-mail is jwaggoner@usatoday.com.

Enlarge By Paul Beaty, AP Richard Rozhko of Howard Jewelry in Chicago with gold items customers have sold to him recently.

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