A. It's probably a good idea to allocate a small percentage (5% or less) of your overall portfolio to gold investment as a diversification because gold tends to move out of sync with stocks and bonds.
Gold is traditionally viewed as a hedge against unexpected, catastropic financial events and inflation, it works well during deflation period too.
Here are a few options to invest in gold:
1. Buy the actual metal
The easiest option is probably the gold metal in one-ounce gold coins such as American Eagles. You can buy them through a reputable dealer, one with a long history (at least 30 years) and lists with BBB. You can even get it from Amazon.
2. Invest in a gold ETF
The iShares Gold Trust (IAU) and SPDR Gold Trust (GLD) are probably two of the most famous ones.
Note that IRS treats gold as a collectible (such as art or a baseball card) and gives special tax treatment - if you sell your shares with holding period longer than 1 year, your gains will be taxed at your ordinary income rate, up to a maximum 28%; any gains for less than 1-year holding period will be taxed as ordinary income up to 39.6%.
3. Invest in gold stocks
This is a riskier approach, because prices of gold stocks are more volatile than the price of the metal itself.
Seekingalpha has an article discussing 2 gold stocks poised for a 2014 rebound: ABX and RIOM, both are speculative ones, proceed with caution.