Gold Sets Sights on Record High

Despite the recent strength, Nadler adds that gold prices could see a significant pullback within the next few months.

"This type of price range isn't sustainable without seriously negatively impacting jewelry demand, or without increasing the supply of scrap jewelry," he says. Thus, increased supply and declining demand would tend to push prices lower.

As for the precious metals patch, UBS raised its rating on Gold Fields(GFI - Cramer's Take - Stockpickr) to buy from neutral, while RBC Capital Markets dinged shares of Silver Wheaton(SLW - Cramer's Take - Stockpickr) to an underperform from sector perform.

Shares of Silver Wheaton were recently dipping 2.6%, while Gold Fields was rising 2.6%.

Frank Barbera, editor of the Gold Stock Technician newsletter , suggests selling positions of major gold miners Newmont Mining(NEM - Cramer's Take - Stockpickr), Goldcorp(GG - Cramer's Take - Stockpickr) and Yamana Gold(AUY - Cramer's Take - Stockpickr) on the grounds that deterioration in the broader stock market will drag them down despite a buoyant gold price.

"We are very confident that the stock market has some really serious downside action ahead of it over the next few weeks and the first quarter," he recently wrote.

Elsewhere, among the miners, the Amex Gold Bugs Index, which tracks a basket of unhedged gold stocks, was rallying 1.1%, led higher by a 3.4% gain in Harmony Gold(HMY - Cramer's Take - Stockpickr).

Meanwhile, cash continued to pour into specialty precious metals funds during November, albeit at a slightly reduced rate. Mutual funds and exchange-traded funds took in net new cash investments of $666 million during the month, down from $957 million in October, according to new data from Boston-based Financial Research Corporation.

The Markets Vectors Gold Miners(GDX - Cramer's Take - Stockpickr) ETF led the pack, adding $201 million, up from $133 million in the previous month. The ETF holds a broad index of mining stocks.

Second in the pack was streetTracks Gold Shares(GLD - Cramer's Take - Stockpickr) which holds bars of gold bullion and saw an inflow of $125 million in November. That was down from $473 in October.