Gold Rush, Part 5

Gold has hit the $1,140 mark and continues to climb.

Gold for December delivery jumped $22.50, or 2%, to settle at a record $1,139.20 a troy ounce Monday. That easily trounces the closing price for Friday, when gold settled at its previous record of $1,116.70 an ounce.
After the close, the price continued to move even higher in electronic trading.

While gold prices have been soaring of late, they don't factor in inflationary adjustments. Current prices are actually a far cry from the record set on Jan. 21, 1980, when gold peaked at $825.50 an ounce (in 1980 dollars). That translates to an all-time peak of $2,163.62 an ounce in 2009 dollars.

Blake Robben, a senior market strategist at Chicago-based commodities brokerage firm Lind-Waldock, said the distinction is a key one because it provides the only real barometer by which to measure a potential ceiling for gold prices.

Robben said the surge is being driven, in part, by the Chinese and Indian governments, which are stockpiling gold. The U.S. government is still the biggest hoarder, with 261.5 million ounces of gold in its reserves, much of it in Fort Knox in Kentucky and the New York Federal Reserve in Manhattan.

"Until the Fed reverses course on monetary policy and this government of ours can get their financial house in order," there is no indication that gold prices will stop climbing, he said.

Hedge your bets. Joe Foster, portfolio manager for the Van Eck Global International Investors Gold Fund, said the rise is being driven by investors who "are becoming increasingly uncomfortable with Fed policies and all the liquidity sloshing around in the global economy."

It jumped $25 an ounce today on the news that Helicopter Ben is keeping rates low low low and dollar keeps crashing.
How high will gold go?