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The price of gold may be down this year, but over the past three it has nearly doubled. No wonder many Americans think it is a good investment. A large number think it is the best investment available to them. That will be true until the normal investment cycle shows that it is not.

A new Gallup poll reports:

Gold leads four other types of investments in Americans’ perceptions of which is “the best long-term investment,” although the 28% choosing it today is down slightly from 34% in August.

The shock of the 2008 stock market drop, in which the Dow Jones Industrial Average lost about half of its value in less than two years, probably has not worn off, although the index has nearly doubled again. Bonds have become a poor investment, many people believe, because rates are so low that they barely yield anything at all. And the interest in real estate investment died suddenly with the housing collapse.

The danger of investing is gold has become greater as the metal has advanced. As is true with any investment, from homes in 2006 to Apple (NASDAQ: AAPL) in 2012, the higher an asset’s value goes, usually the more likely that there is a risk of a sharp reversal. Gold’s extraordinary run makes it a good investment for people who bought it two or three years ago — if they sell at the right time. For people who might buy it now, the risk is higher — much higher — as the recent drop in its prices already shows.

Real estate and bonds have gone out of vogue, after being in vogue for years. The cycle of which investments are attractive will spin again, and gold probably will end up on the bottom.

Methodology: Results for this Gallup poll are based on telephone interviews conducted April 9 to 12, 2012, with a random sample of 1,016 adults, aged 18 and older, living in all 50 U.S. states and the District of Columbia.

Douglas A. McIntyre