Gold is starting to perk up and catch the attention of market players and serious investors on Wall Street.The sector was on fire on Tuesday with big gains that clocked in at more than 4.5%, lagging only the consumer services sector for the top-performing industry. Some very strong action could be found in names such as Vista Gold ( VGZ), NovaGold Resources ( NG), Western Goldfields ( WGW) and Golden Star Resources ( GSS - Get Report). There could be a number of explanations for why gold is starting to show some real strength. Investors could be using it as a hedge against stock market declines, considering how much the market has run since March lows. The weak dollar is also a strong contributor, and strong demand from China and other emerging markets has helped push the yellow metal higher. A bigger potential explanation for the strength in gold is fear of inflation. Many investors are worried that inflation is right around the corner, and the recent strength in commodities is helping to support that argument. On Tuesday, crude oil busted through $60 a barrel, marking its highest levels in six months. Prices for gasoline at the pump have also started to rise noticeably, turning up more than 20 cents on average in just the past couple of weeks. Investors are also worried that inflation will increase due to the Federal Reserve's printing large amounts of money while the U.S. runs such a high deficit. This action by the Fed could result in the devaluing of the U.S. dollar, which would in turn cause massive inflation. When investors fear inflation they run to gold to hedge against the worst possible case scenario. One thing is certain with gold, at least from a technical perspective: It will not be in true bullish mode until it takes out $1,000 an ounce and holds that level. Gold has twice traded up to that level and failed to break out. Could the third time be the charm? Currently, the spot price for gold is trading at around $930 an ounce. Watch for a breakout of $1,000 for real confirmation that inflation and the strength in gold is the real deal. With this in mind, let's take a look at a few gold stock charts that could be great plays if gold is finally ready to take out $1,000 an ounce. To read more, visit Stockpickr.com.
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