Gold Bugs Grit Teeth

MarketWatch, Myra Saefong

Many investors have a great love affair with gold, but as with any relationship, they'll have to work hard to get the most out of it, be patient and most of all—understand the reasons for gold's actions.

That's particularly true in the current trading environment, where action in the U.S. dollar, commodities, stocks and global economies have pushed and pulled at investors' heart strings.

"Many investors 'date' stocks, but some 'marry' gold," said Philip Romero, a finance professor at the University of Oregon and former chief economist of California. The "holding period for stocks has been shortening, but I expect holding periods for gold have been lengthening."

And for many gold bugs, their holding period is "forever—till death do they part," he said.

For many, that's a commitment well worth it. Investors' love affair with gold began about a decade ago, when gold-futures prices traded roughly around $260 an ounce. Gold futures closed above $1,540 on Thursday.

Gold has been in a 10-year bull market, beginning when the economy was at "full employment and the U.S. budget was balanced," said Brian Greenberg, owner of wealth management firm Brian Greenberg & Associates in Marlton, N.J. Today, there's real unemployment at 16%, coupled with $1.6 trillion budget deficits "as far as the eye can see."

It's no wonder investors have flocked to the so-called "safe haven" of gold investment.

Gold prices have climbed as the dollar falls in value, but they don't always inversely track the greenback's movements.

Gold's "like a planet that is pulled by various moons rather than just one," said Christopher Ecclestone, mining strategist at Hallgarten & Company LLC.

"Unusual circumstances can lead to unusual results," he said. "Investors need to be on guard for the unexpected because the unexpected appears to be the norm today."