Gold hits new high

Investors are becoming increasingly wary of the US government's trillion dollar deficits and are turning to the protection of gold.

The threat of inflation has sparked a 19 percent gain in gold bullion and on Tuesday gold futures reached a new record topping out at $1,045. A driving factor behind gold's advance is the decline of the US dollar which has repeatedly hit new lows throughout 2009. Dan Greenhaus of Miller Tabak and Co. in New York said,

“Gold is a forecaster of inflation instead of a coincident indicator, There’s nothing right now that says inflation will break out to all-time highs. But gold can move considerably higher from here. Should growth return, inflation will return."

With demand for gold at an all time high and coupled with the threat of inflation in the future Leonard Kaplan of Prospector Asset Management believes gold can only up,

"The Fed has sent so much money into the market, so everything has to go up, including gold."