Ethical issues about gold mining aside, from a purely investment perspective gold and gold stocks look like a good buy at current levels.
The 12-year bull market in gold might have ended more than a year ago, when its price reached $1,925 an ounce. Its current price of $1,650 is 15% below the peak, yet gold still rose in price last year (though by only 7%). But from a tactical standpoint, both the gold price--and gold stocks--now offer the potential for a rebound.
After a year in which major stock indexes around the world returned about 15%, it is difficult to find asset classes that are depressed enough to offer an attractive return given the risks. I think gold-and especially gold stocks--now offer this.
I do not, however, consider this a "buy and hold" situation. The long-term bull market in gold may indeed be over. But I think there will still be a solid move higher from here.
The prices of the metal and the stocks have fallen sharply, and are now technically "oversold" (and likely to rebound). And key investor sentiment measures indicate levels of pessimism that historically have been followed by large percentage gains in the stock prices. The Hulbert Gold Sentiment index, for example, is now at a level which over the past fifteen years, has been associated with annualized gains on the XAU gold stock index of 60%.
Remember, the best time to buy something is usually when few others are clamoring to do so.