With gold having dropped to a four-year low earlier this month, is now the moment to jump in?

John Waggoner of USA Today presents pros and cons.

"By and large, gold has been a lousy inflation hedge and, for the last three years at least, a lousy investment," he writes.

"But gold is cheap right now—or at least, cheaper than it has been—and so are the stocks of the companies that pull the yellow metal out of the ground. For that reason, it's worth looking at both."

To be sure, gold could just as easily fall as rise, Waggoner points out.

The precious metal hit a record high of $1,923.70 an ounce in September 2011. It slumped to $1,130.40 Nov. 7, and December gold futures ended at $1,197.70 Friday on the New York Comex. That represents a 5.6 percent rebound from the four-year low.

Gold could benefit if the dollar falls. The greenback has reached a seven-year high against the yen and a two-year high against the euro this month.

The dollar "looks way overbought, euro and yen way oversold," Chris Mancini, analyst for Gabelli Gold fund, told USA Today.

But given the divergence of monetary policy between the Federal Reserve and the Bank of Japan/European Central Bank, the greenback may remain strong.

Gold hit a three-week high Friday after China announced an interest-rate cut.

"People will buy gold as a hedge, since it is clear that China wants to stimulate growth,”

Santalla, a sales and marketing manager at Heraeus Metal, told Bloomberg. "Also, we are seeing a rise in physical demand."

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