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Solid gold in the shape of Japan's Mount FujiYURIKO NAKAO

Now that the Olympics have ended, the most economically minded winning athletes are looking to convert their gold metals into cash through endorsement deals.

Many ETF investors, however, may be wondering whether now is a good time to ring the cash register on their gold funds or initiate new positions in the metal.

Gold has gained attention and accessibility as an investment option via ETFs, and the metal is valued because of its usefulness as a portfolio diversifier and its ability to outperform the stock market for long periods at a time.

In 2009, gold prices rose 24 per cent, while they remain essentially unchanged since the start of 2010. As gold trades sideways, investors are left deciding whether now is the time to cash out, sell short, or buy long. Before looking at the outlook and strategy, let's go over the best fund choices.

In 2010, the most popularly traded gold ETF is still SPDR Gold Shares , a physically backed fund that is up 2 per cent year to date. GLD is a great way to hop on the gold bandwagon and investors who do so are in good company with current holders such as investor George Soros, hedge fund Paulson and Co., and China's sovereign wealth fund.

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Another popular physically backed option is iShares COMEX Gold Trust , which has the same 0.4 per cent expense ratio as GLD and is also up 2 per cent year to date. Less popular, but still very liquid and featuring a slightly lower expense ratio is the ETFS Physical Swiss Gold Shares .

There is also the Sprott Physical Gold Trust , which was launched last Friday and trades at about one tenth the price of IAU, GLD, or SGOL, making it appealing to smaller investors. The expense ratio is capped at 0.65 per cent, which is higher than the other three gold funds, and the PHYS prospectus touts potential tax benefits for U.S. investors in the fund.

As an alternative to physically backed gold ETFs, investors can use gold-miner ETFs that feature companies like Barrick , Newmont , AngloGold Ashanti and Goldcorp.

MarketVectors Gold Miners ETF and MarketVectors Junior Gold Miners ETF have outperformed GLD and IAU during upward trends in gold prices, but have underperformed in downward trends, and are a more volatile play on gold prices.

If investors want volatility in their gold investments, there are many leveraged funds. Two of the more popular and liquid ones are the PowerShares DB Gold Double Long ETN , and the PowerShares DB Gold Double Short . Leveraged funds are best for shorter investment time-frames, but long investors should also take into account their investment time-frame when they develop their strategies.

For instance, in the mid-term, the World Gold Council expects that as economies continue to improve worldwide in 2010, demand for jewellery will pick up along with incomes and consumer spending. Jewellery consumption accounted for 52 per cent of total world demand for gold in 2009. However, in 2009, jewellery demand was only 80 per cent of 2008 jewellery demand and 73 per cent of that demand in 2007 demand.

Also, industrial demand for the metal will increase as business picks up for companies that rely on gold. Like jewellery demand, industrial demand is still below its pre-recession numbers and will provide steadily increasing price support for gold.

Furthermore, World Gold Council data shows that the rise in gold prices in 2009 was not brought about by the investment activity of ETF investors or other traders after the first quarter. As a result, the price of gold in the mid-term is not at risk of dropping due to any sort of speculative bubble popping.

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In the short term, however, investors should keep in mind that the price of gold has generally maintained an inverse correlation with the U.S. dollar. If the dollar continues to gain against the euro, this will put downward pressure on gold. Investors who had been holding gold as a hedge against inflation will become less inclined to bet on a dollar downfall while the currency is thriving.

However, some of this downward pressure on the price of gold from a falling euro may be offset as investors in the euro-zone and Greece in particular look to the metal as a safe-haven for their wealth. Demand from panicked Europeans may pick up especially if other larger euro countries, such as Spain, come under scrutiny because of their government debt.

In the long term, gold may continue to rise in value as governments worldwide accrue debt and erode the value of their currencies with spending for economic stimulus. Many analysts say this long term trend will lead to the continued appreciation of gold against paper currencies. For instance, gold has appreciated by at least 10 per cent per annum in the past decade against every major currency.