Gold's record run: No end in sight

NEW YORK (CNNMoney.com) -- Gold prices surged to record highs yet again Monday, topping $1,139 an ounce, as investors continue to favor the precious metal over currencies like the U.S. dollar.

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."

"They're looking to hedge against all potential inflation, hedge against potential asset bubbles and hedge against the weak dollar," he said.

Foster added that it's not just the weak dollar that is driving gold -- but international currency, as well.

"It's been moving up in all currencies, and that means that people globally are losing faith in paper currencies around the world," he said.

On Monday, Federal Reserve Chairman Ben Bernanke said the U.S. economic recovery will be modest, with high unemployment continuing to dog the economy in the foreseeable future.