Gold at all-time high. Thanks, Washington!

Gold prices have surged to a record high thanks to concerns about the debt ceiling. But Europe's debt problems have been a factor too. Click the chart for more on gold and other commodities.

NEW YORK (CNNMoney) -- I think I've figured out why this debt ceiling fiasco is being dragged out to the last possible minute.

The longer that politicians hold off on an agreement, the higher gold prices will go. And then the U.S. will unload its massive stake of gold to help offset some of the spending cuts!

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Note to conspiracy theorists. I am JOKING. In fact, Treasury Secretary Tim Geithner ruled out the sale of any of the nation's gold assets just two months ago.

But I am not kidding about rising gold prices. Back in mid-May, gold was trading at about $1,515 an ounce. Today, just a little more than a week until a possible U.S. default? Gold's near $1,615 an ounce, after hitting a new intraday record of about $1,624 earlier Monday morning.

With the unthinkable (no debt ceiling agreement before Aug. 2) now thinkable, gold is likely to keep climbing.

U.S. Treasury bonds won't be as much of a safe haven if Standard & Poor's and Moody's cut the nation's credit rating. The dollar? It will clearly suffer if there's no deal.

And stocks? Hard to imagine how they'd go up next week if Uncle Sam defaults. Next week may not necessarily be as bad as the post-Lehman Brothers bankruptcy/failure to pass the bank bailout on the first go-around days. But it certainly won't be pretty.

Gold, however, thrives in market and economic environments like this. Forget the oft-quoted (but not really forward-looking) VIX (VIX). Gold is the real fear gauge. So the question may be not whether gold goes up but by how much.

"The biggest factor driving gold is the debt ceiling news -- or lack thereof. Nobody wants risk right now," said David Beahm, vice president of economic research with Blanchard & Company Inc., a New Oreleans-based investing firm that specializes in tangible assets like gold and other precious metals.

Beahm said that if (or more hopefully when) there is an agreement to raise the debt limit, gold prices should pull back a bit because the dreaded cloud of "uncertainty" will finally be lifted.

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But even if a deal is reached soon, gold could continue to climb higher once the euphoria about avoiding Default-ageddon subsides.

It's important to remember that although politicians are trying to find a way to cut the deficit going forward, the immediate result of boosting our borrowing limit is more spending.

"Higher debt levels could potentially lead to further debasement of the U.S. dollar and gold is a play on a weaker currency," said Ted Wright, director of portfolio management for Genworth Financial Asset Management in Encino, Calif.

"Adding more debt also adds an element of inflation to the picture and that could spark gold to go higher," Wright said.

There's also the possibility that the government could make the economy worse in the short-run if it decides to drastically pull back on spending over the next few years.

And that could mean that the Federal Reserve, which has already kept interest rates near zero since December 2008 and has injected trillions of dollars into the bond markets, may take more drastic steps to keep the economy afloat. The net result of such actions would probably be bad for the dollar and great for gold.

"If fiscal cuts are too large, the likelihood of a double dip recession in the US economy will increase. In turn, the spectre of additional monetary easing due to a weakening economy would support gold prices," wrote commodity analysts at BofA Merrill Lynch in a report late last week.

Gold isn't just rallying because of the problems in the U.S. either. Beahm still thinks gold could go higher because it's not as if Europe's debt problems are completely solved.

After all, gold is increasingly being viewed by traders as a currency alternative. With the dollar and euro both hobbled by severe fiscal problems, that's another reason gold can, uh, shine. (Sorry. Couldn't resist.)

It's not just traders either. James Dailey, manager of the TEAM Asset Strategy Fund (TEAMX) in Harrisburg, Pa., pointed out that many emerging market economies need to buy gold because of trade imbalances.

"Gold would be in a bull market even if there weren't concerns about sovereign debt. That's just adding gasoline to a raging fire," said Dailey. "China and Brazil, because of their trade surpluses, need to be voracious buyers of gold."

With all that in mind, Wright said he thinks gold should march higher. But he said he has no clue how much more gold could run.

"I won't even attempt to put a number on where gold goes. You need a light at the end of the tunnel on the debt ceiling and cutting the deficit," he said.

Beahm agreed. But he said he thinks gold may have room to run until it gets close to the all-time inflation-adjusted highs for the metal from the early 1980s. And that's between $2,200 and $2,300 an ounce.

Even though that may sound high -- it's another 40% higher from current levels -- Beahm notes that people who have been doubting gold and calling it a bubble have been wrong for a while now.

"Sure, a lot of people have been saying they don't want to buy gold at what they think are the highs," he said. "But many have been saying that since gold was at $800 an ounce."

The opinions expressed in this commentary are solely those of Paul R. La Monica. Other than Time Warner, the parent of CNNMoney, and Abbott Laboratories, La Monica does not own positions in any individual stocks.