NEW YORK — An ounce of gold has reached $800 for the first time since 1980. Here's what that means to you.

Q. Will rising gold prices affect the average consumer?

A. Not a whole lot. Some jewelry retailers, especially small ones, might have to pass along some of the higher costs to consumers to make a profit. But craftsmanship influences jewelry pricing more than raw materials do. Gold is used in small amounts in electronics, too, but not enough to affect price tags noticeably.

Growing demand for gold jewelry in India and China is one reason gold prices have increased over the past several years. Other reasons include the falling dollar and the fact that the commodities markets have become very popular for speculators.

Q. So it looks like gold is on the upswing. Should I invest in it?

A. Many experts will tell you that precious metals are a good way to diversify your portfolio, particularly as a hedge against inflation. But as with any investment, they advise against putting too much money in one basket. Over the long term, gold is apt to hold its value but in the short-term it can be very volatile.

Q. What kinds of gold-related investments are there?

A. A gold bullion exchange-traded fund, or ETF, tracks the price of physical gold in the commodities market. Income on these investments is taxed at a rate of 28 percent, because the government treats them as if you owned actual gold.

A gold futures ETF essentially tracks what traders expect the price of gold to be at a later date. These investments are taxed at a maximum rate of 23 percent, but also earn 5 percent annual interest.

Another choice is investing in mining companies, either through stock or an index fund that tracks mining companies. These investments have lower tax rates than gold ETFs and can provide better returns if the companies hedge their bets properly.

Probably the best thing for inexperienced investors is to buy into a mutual fund that has some exposure to gold. That way, you benefit from any jumps in gold prices but don't lose your shirt if the market turns south.

Q. What about those gold coins they advertise on TV and the Internet?

A. There's nothing wrong with buying physical gold, but once you have it, you need a place to put it. You may end up spending more insuring and locking up your gold than you make on its rise in value.