Is gold still a good investment?

Gold has definitely lost some of its lustre for investors as market volatility, global inflation fears and a beat-up gold mining sector have forced prices to drop about $700 (U.S.) an ounce in less than three years.

"Coming out of 2001-2002 with gold at $259 an ounce, you saw a growth or an increase in inflation, you saw increases in demand, and gold rode a pretty good ride from then all the way into 2010," says Michael Levy, a business analyst and president of White Rock, B.C.-based Border Gold Corp. "I mean, we went from $260 an ounce up over $1,900 an ounce."