I have not posted in sajha in a while, but I visit every once in a while to see what the current hot topics amongst my brethren are. I felt compelled to write something on this, as it is something I am also familiar with professionally. 

While I agree to the long term growth prospects of precious metals specifically  (and commodities in general), I dont think it is wise to overweight portfolios in such a volatile segment despite the potential growth. It definitely creates that additional 'lustre" (no pun intended) to an investor's portfolio, and NAS has provided a very good illustration as to why, but abandoning a classic asset allocation strategy to create a largely one dimensional model is definitely not something I see as a better fit.

Maybe changing the classic asset allocation model to incorporate some of these 'hedges' to currency (the Paulson strategy of denominating all investments in gold, or adding more foreign currency exposure, for example)  will serve to the benefit of the investor in this new global environment of low rates, low growth (some driven by austerity, some just unwilling to grow)  and possibly high inflation (hyper Stagflation?). BUT overweighting a sector that was dormant, even negative for almost 30 years before making a phenomenal appreciation in value over the past 3 years, in my humble opinion carries more risk than reward.

These are just my thoughts though.