Making a case for gold investments may seem harder with inflation under control and unlikely to get out of hand anytime soon thanks to low oil prices and moderate commodity costs.

Not so, say gold advocates who are convinced that the 1993 rally that brought bullion near $400 an ounce is only the beginning of a major bull market.Charles M. LaLoggia, who examines investment trends in his newsletter LaLoggia's Special Situation Report and Stock Market Forecast, believes the traditional pitch for gold as an inflation hedge still carries weight.

People who shun gold and its proxies - such as mining company stocks - simply because the United States has enjoyed several years of mild inflation are missing out on rewarding investment opportunities, he contends.

Putting some historical perspective on the country's inflation performance helps explain his point. The 2.7 percent increase in the Consumer Price Index last year looks abnormally low to anyone who remembers the double-digit inflation rates of the 1980s. But, in fact, it is close to the 3 percent average annual rate since the 1920s.

And LaLoggia thinks rapid growth in the U.S. money supply over the past three years inevitably will cause inflation to resurface. Even if prices don't skyrocket, they could easily bob up above the historical norm of 3 percent.

In addition, LaLoggia recommends investors view gold from a global standpoint.

"In most of the developing Asian economies, where wealth is being accumulated rapidly, gold is considered to be a store of wealth, a sign of status and also an insurance policy against inflation and financial upheaval," he wrote in a recent issue of his Rochester, N.Y.-based newsletter.

Another factor shaping gold's fate is that Russia unloaded most of its gold reserves during the breakup of the Soviet Union and now its mining industry is in disarray. That will curb future supply.

The shrinking supply could come at a time of rising demand. James Benham, chairman of the Benham Group mutual fund company, said the German and Japanese currencies that formerly gave inflation-wary investors safe havens have lost some of their credibility due to economic difficulties in those countries.

Gold "demand is being fueled by the absence of any true hard currencies for investors," noted Benham.