I, along with many other observers, was caught unprepared for the recent surge in gold prices. The 13% jump in the price of gold has been (not surprisingly) accompanied by a surge in optimism among most market participants and investment newsletter writers. However, since the late 1990's, when newsletter writers have been highly optimistic about gold prices, the annualized price change of gold has been -46%.
There is one group of market participants--commercial buyers (the "smart money")--that is not optimistic. Sentiment among commercial buyers has plummeted as the price of gold has surged. Since the 1980's, when sentiment among this group has been low, the annualized price of gold has fallen 14%.
So despite missing the recent jump in the price of gold I definitely would not buy gold at current levels.