Gold Breaks Records Again

NEW YORK (TheStreet) -- The U.S. dollar is "dead," says one observer, as gold prices soared anew on Monday.

"The only party that doesn't know the U.S. dollar is dead is the U.S. dollar," says Peter Grandich, founder of Grandich Publications and chief commentator on Agoracom.com. The U.S. dollar index was slipping 0.81% to $74.96 while gold prices hit an all-time high of $1,174 an ounce.

"We are now seeing established not crazy people [who are] always predicting the end of the earth, [but] significant money managers from around the world from Einhorn ... to Paulson [who] are all aggressively buying gold and looking for it to go higher."

Gold is becoming its own asset class, not just a safe haven asset that increases its appeal to everyday investors. Grandich argues that "all different types of [buying are] hitting the markets at a time when the commercial traders and perma-bears have been aggressively short and they are getting squeezed."

This new trend-buying and short-covering support higher prices as investors invest in gold on daily mini pullbacks. On Friday, gold opened lower at $1,132, but then bounced back to $1,146 only to surge even higher on Monday.

Gold delivery for December was popping $25.10 to $1,171.90 an ounce at the Comex division of the New York Mercantile Exchange. The contract has traded as high as $1,174 and as low as $1,151.

Silver prices were also adding 43 cents to $18.87, while copper was rising 5 cents to $3.16.

Some analysts predict short-term weakness and volatility. Options expirations and a shortened trading week in the U.S. can lead to lighter volume and more dramatic price swings in equities and the precious metal sector.