The price of gold has risen sharply in the past few years and it has attracted a lot of interest from investors. In fact, just a few weeks ago, the price of gold had risen to an all time high of $1,072 an once and many believe that it will continue going much higher in the next few years. It was not long ago when the price of gold was only $300 an ounce in 2002.

Why has gold risen so sharply in the past few years? One reason is gold is only at a record high in US dollar terms because of the sharp fall in the US currency. The US government has been printing a lot of money to try to revive the US economy and it has led to paper money becoming more and more worthless. Therefore, the gold price has been rising because you can not print gold. As well, both China and Russia are now greatly increasing their gold purchases and disposing of their US dollars as fast as they can, and the Chinese Government is also publicly encouraging its citizens to buy gold. In general, the gold price tends to rise when the US dollar falls.

As well, gold is considered a safe haven in times of political as well as economic turmoil. We have seen gold rise sharply after events such as the 911 attacks and most recently, during the financial crisis.

Lastly, gold is becoming a rare commodity and harder to find these days. Gold miners are not discovering rich veins of gold today like they used to and nowadays hope to find mere flecks of gold. As well, not many new gold mines have come into production in recent years. With the absence of big new discoveries, demand for gold continues to grow, as does its price.

So how do investors take advantage of rising gold prices and profit from it? There are several ways to invest in gold. One way is to buy physical gold bullion or gold coins that you can store in the bank vault. The benefit of owning physical gold is you can physically hold your investment even if the world's banking system collapses.

Another way is to buy an exchange traded fund (ETF) that is listed on the stock exchange and invests only in physical gold. It tracks the price of gold based on the spot price and doesn't require you to physically store gold. You can buy this ETF like a stock and the symbol is GLD.

Other investors prefer to buy gold company shares because you can make more money when the price of gold rises. For example, if the gold price rises 100 per cent, most gold company shares can probably rise 200-300 per cent and some junior gold mining company can rise 400 per cent or more. The reason is gold stocks amplifies a gold price rise because the company's profitability can rise at three times or more the rise in the gold price.

Whichever way you decide to invest in gold, you will benefit from the rise in the price of gold for years to come.