Many analysts believe Gold will be one of the best performing assets in 2009. With portfolios values sitting 30-50% below the 2007 market peak, there’s no time like the present to consider investments outside traditional mutual funds, individual equities and fixed income offerings.

There are numerous economic and demand-driven reasons supporting an upward move in gold values, but two primary arguments lead us to believe a potentially explosive move in gold will occur some time this coming year.

First, Gold is well-recognized as an effective hedge against inflation. While deflation is the likely scenario in the near term, massive government liquidity infusions as a result of the government’s TARP program are likely to drive inflation much higher over the longer-term. As soon as the world accepts that higher inflation is inevitable, foreign demand for gold will increase.

Secondly, gold values have historically been negatively correlated with the dollar. While the dollar has enjoyed strength during the current credit crisis, that strength was driven by foreign investors taking short-term positions in the dollar as their own economies faced credit meltdowns and banking crises. As overseas markets gain strength and developing markets advance economically, the dollar’s attractiveness is likely to wane.

Depending on each clients’ individual financial situation, a commodity holding like gold typically ranges from 0-5% of their total portfolio allocation. Some potential investments to research for exposure to Gold include GLD (tracks the price of Gold Bullion), GG (Goldcorp, Inc., engages in the acquisition, exploration, development of precious metals properties), and GFI (Gold Fields Limited engages in the exploration, extraction, processing, and smelting of gold in South Africa, Ghana, Australia, and Peru).