Gold Rush, Part 6

Gold topped $1,200 an ounce earlier today and continues to rise in the short term, and probably the medium term too.

Gold hit record highs above $1,200 an ounce on Tuesday as dollar weakness fueled buying of the metal as an alternative asset, while investors speculating on more gains were cheered by its recovery from last week's losses. 

Spot gold hit a peak above $1,200 an ounce, against $1,179.10 late in New York on Monday.

Prices could push to even more record highs if the dollar continued to weaken, analysts said. Significant downside risks to the price were unlikely to be seen before January, said Michael Lewis, head of commodities research at Deutsche Bank, with seasonal factors affecting the dollar likely to drive gold higher in the short term.

"We see $1.55 in the euro-dollar, so that is where we think the main catalyst is for new highs for gold," he said. "There is normally quite a strong seasonal pattern in the dollar, (and that) will be driving a further rally in gold."

As the dollar continues to weaken, more people will continue to invest in gold and other commodities.  Eventually that's going to catch up to us.  When it does, well...just another bubble to burst.