Gold is traditionally sought after as a store of value in times of severe economic dislocation, an insurance policy against financial Armageddon. Its historically low to negative correlations with most broad asset classes indicate that gold might be a worthwhile investment for a small portion of an investor's portfolio.
While gold has exhibited a low level of volatility relative to equities over the past quarter century, the massive price swings experienced from the early 1970s through the mid-1980s -- as well as its sharp sell-off in 2013 -- demonstrate the effects of fickle investor sentiment.
This type of volatility also underscores why an allocation to gold should probably occupy only a small portion of a well-diversified portfolio. As for an investment in physical gold through an exchange-traded product (ETP), gold ETPs are the least costly, most broadly accessible, and most liquid vehicles for acting upon one's gilded aspirations.