'Fast Money' Recap: How to Trade Gold

NEW YORK (TheStreet) -- The markets surged again Tuesday as gold hit a new high.

The Dow Jones Industrial Average jumped 131.50, or 1.37%, to 9731.25, while the S&P 500 was up 14.26, or 1.37% to 1054.72. The Nasdaq added 35.42, or 1.71%, to 2102.42.

Tim Seymour on CNBC's "Fast Money" TV show that the rally was fueled by a move by the Australian central to set monetary policy by raising rates and rumors that Saudia Arabia was talking with other countries to reprice oil in an currency other than the U.S. dollar.

Joe Terranova added that the Australia dollar is enjoying a currency yield and providing a liquidity boost that is boosting all assets.

Pete Najarian said the market is getting leadership from the financials and technology along with a big increase in the volume of options trading today.

For a breakout of some stocks from a recent "Fast Money" TV show, check out Dan Fitzpatrick's "3 Stocks I Saw on TV."

3 Stocks I Saw on TV

Melissa Lee, the moderator of the show, said that the tell for the market might have the dollar, which sank to nearly a new low for the year.

Lee shifted the discussion to the soaring price of gold, which hit a nominal high of $1042.80 an ounce. Najarian said there has been incredible activity in the Market Vectors Gold Miners (GDX Quote) and usually strong options activity in Gold Fields (GFI Quote).

Adami warned investors about not getting carried away by the momentum trade, saying the valuation don't make sense at this level. He said there are company and organizational risks in being long on the gold mining stocks. He said he would rather be in SPDR Gold Shares (GLD Quote).

Seymour said he believes gold is going higher, adding gold will wind up higher for the ninth consecutive year. "That hasn't happened since the 1940's," he said.