What is the best commodity to invest in these days? Undoubtedly, it is gold that has the global charm for huge investment potential.

A new survey from New York-based hedge fund Ospraie Management LLC said on Tuesday that gold will be among the five best commodity-investment opportunities over the next two years thanks to the declining production of the yellow metal.

The hedge fund said that rising costs and lack of investment have limited output in South Africa, the world's largest gold producer, Peru and other countries.

"We look at gold as a barometer of wealth in the world," Ospraie said adding: "The underpinning of demand is very strong."

In the last few years, growing purchasing power in Asian countries such as India and China has spurred demand for gold, pushing prices up 11 per cent in the past year.

Gold production growth exceeded population growth from the 1840s to 1940s. It declined after World War II for almost 50 years, but started up again in 1989.

But according to the data from the World Gold Council, gold production dropped 3.1 per cent to a 10-year low of 2,471 metric tonne in 2006. Worldwide gold mine production had fallen by five per cent in 2004, with the 2,464 tons marking an eight-year low.

Experts say rising costs are hindering the exploration by gold producers such as Barrick Gold Corp, the world's largest gold mining company. Newmont Mining Corp, the second biggest producer, said in April first-quarter profit plunged 67 per cent as output slumped and costs rose.

The price of gold has been rising for over six years. The price of gold has gained 158 per cent since then. That works out to 26 per cent per annum, which has consistently been better than most other markets.

Global commodity companies believe that gold will likely rise for years to come, eventually reaching at least $2000 and it will probably go even higher.

Investment experts say gold is the best commodity to invest in because it has stood the test of time.

"Gold has a 5,000 year solid track record. It is a time-tested and valuable commodity. It always has been, and it always will be. So it is the ideal commodity to invest in these days," Prahlad Patel, a gold investment expert told Commodity Online.

According to him, gold is real money and it has maintained its purchasing power over the centuries.

"As the dollar continues to slide, and spending and money creation continue on their merry way, gold will be the ultimate beneficiary," he added.

Experts have also predicted that China will become the largest gold producer in the world by 2010. Between 1997 and 2006 production of gold in China increased by 162.8 tonnes to 247.2 tonnes.

While gold production in traditional producing countries such as South Africa has declined over recent years, output from emerging gold producing countries has increased from 17.7 per cent of global production to 29.8 per cent in the last ten years.

China's gold production for the first quarter of 2007 was recently recorded at 56.183 tonnes, an increase of 15.99 per cent on the same period last year.