Have you noticed all of the appeals to cash in your gold jewelry? Or the news articles about the rising price of gold? Has your broker recently recommended you buy gold?

The hype is on. In fact, the price of gold has bubbled in the last couple of years and is on the verge of bursting. Small investors are bidding up demand for gold, but this is all speculation.

There are no economic reasons for this upsurge. It is all based on fear. Actually, a myriad of fears. The fear of inflation. The fear of currency devaluation. The fear of China. The fear of government. The fear of our economic system. The fear of not being altogether clear about what to fear.

The price of gold appears to have climaxed on the first business day of 2010. Since then, the price of gold has dropped 6 percent. If fears of many kinds were driving its price up, then we might conclude that those fears are dissipating. And there is some economic evidence to support the overall reduction in fear or, alternatively, the increase in positive outlooks.

Matt Whittaker writes in the Wall Street Journal, gold lacks a strong "direction because investors are vacillating between fear and optimism about the global economy." Gold is a magnet for bad news: the "badder," the gladder the gold owner.

As long as the Federal Reserve continues to buy U.S. Treasury bonds as a means to keep interest rates down, gold may continue to sustain its appeal as an inflation hedge. But, on the other hand, the Fed may be easing off on its qualitative easing — the official name of its bond purchasing. The Fed seeks to hold the line on interest rates and Treasury yields in order to boost the appetite for risk or borrowing.

If the pressure of inflation becomes real, and food and fuel prices suggest that possibility, the Fed will back off, interest rates will rise and the appeal of gold may fall. Though touted as an inflation hedge, gold has not kept up with inflation since 1980.

We are also seeing a rise in the price of put options — bets that gold prices will fall. Many managers, including yours truly, have redeemed their gold positions. Gold gained about 30 percent in 2010 on a wave of fears. Gold as insurance is losing its luster.

The seas are calmer now, and those who sought refuge in the yellow metal are themselves seeing hope on the horizon in the form of genuine economically based opportunities. The developed world has delivered better-than-expected economic data.

Gold was never a well-reasoned commodity purchase, because of its limited economic utility and its keen attractiveness to those full of fears. The shine is off gold at the moment, and this recent tarnishing is a harbinger of good news to come.

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Donald E. Askey, a certified financial planner professional and president of Provident Advisory Group, is a registered fee-only adviser, headquartered in Newburyport. For questions, visit www.providentadvisory.com.