Page 1 of 2

Christine St Anne is Morningstar's online editor.

Gold was one of the few stellar performers in 2011, reaching record highs of US$1628.50 an ounce.

In the last two years to April 2011, the S&P/ASX 200 delivered an 18 per cent return, while the gold price (in US dollars) increased by 33 per cent per annum.

Amid the global market shakedown, investors poured millions into the metal, which has always been seen as a safe haven.

In fact, when BetaShares launched its gold bullion exchange-traded fund in May last year, the product attracted $2 million in the first of month of trading.

Investors' love for gold has spurred some commodity producers to be creative.

Dallas-based Dillon Gage Metals recently enlisted the services of French couturier Jean-Paul Gaultier. Gaultier, who has also designed for Kylie Minogue and Madonna, has created a one-ounce gold bar.

The gold bar not only displays Gaultier's name but includes his trademark sailor stripe.

"As a collectable or item of jewellery, it's a pretty smart move. As an investment, I can find much better places to spend cash," City Index chief market analyst Peter Esho says.

Nevertheless, many investors have seen gold as the safe place to park their cash, particularly given that market uncertainty is set to continue in 2012.

The crisis in Europe is still yet to be resolved. Some analysts note that the ambiguous markets will continue to support the case for gold, particularly given that issues around the crisis in Europe and those in the US are yet to be resolved.

"With market volatility continuing, precious metals remain a good diversifying safe haven for storing wealth in 2012," CMC Markets chief market analyst Ric Spooner says.

Spooner says factors beyond market safety will also support the price of gold and other precious metals.

"Many factors seem to indicate precious metals will perform well in 2012. These include low international interest rates, demand from China as it seeks to diversify its exposure to US dollars, and growing wealth of traditional gold-owning nations such as India and China," he says.

However, City Index's Esho has a much more bearish view on the outlook for gold.

"The consensus is overwhelmingly bullish on gold in the market, but our view is slightly different. We think the easy gains in gold have passed," Esho says.

"The issues that saw gold rise are still relevant, but as the world works through its issues, the case for gold becomes harder to argue without taking into consideration the vulnerabilities."