• There are many institutional and central bank buyers on the sidelines at these prices but they will provide strong support with many waiting to buy on the dips.

• December is seasonally a strong month for gold with jewelry demand for Christmas and then the increasingly important Chinese New Year demand and this means that any price correction is likely to be reasonably shallow.

• “Gold continues to defy gravity and for good reasons: The shift out of fiat currency such as the dollar is happening at a swifter pace than most imagined it would,” said Kevin Kerr, president of Kerr Trading International.

• Gold has risen by more than 7 percent since touching a low of $1,136.80 last Friday on now-waning fears that the Middle Eastern emirate Dubai might default on its debt, which spurred investors to sell the metal to raise cash to cover losses.

***

Gold has long been favored by some elements of the investment world, but this year, some of the world’s leading hedge fund managers have loaded up on the precious metal amid concern that government efforts to avoid another Great Depression could undermine major currencies and fuel inflation.

• “There is investment demand for gold from everywhere,” said Frank Lesh, a trader at FuturePath Trading LLC in Chicago. “The dollar has pushed gold to new highs.”

• “I have never been a gold bug,” Paul Tudor Jones, chairman of hedge fund giant Tudor Investment Corp., wrote in an Oct. 15 letter to investors. “It is just an asset that, like everything else in life, has its time and place. And now is that time.”

• John Paulson’s Paulson & Co. — one of the world’s largest hedge fund firms and one that made billions betting against subprime mortgages — became a huge gold investor this year and plans to start a new gold fund next month.

• Greenlight Capital, run by David Einhorn, reversed a long-time aversion to gold, while Kyle Bass’s Hayman Advisors held more than 15 percent of its portfolio in gold and other precious metals this year.

• “I can’t remember in 20 years so many respected investors focused on a single strategy,” said Bradley Alford of Alpha Capital Management, which invests in hedge funds. “It’s a losing proposition to bet against guys like that. They aren’t billionaires because they make bad bets.”

Tags: gold as an investment, Gold News, Gold price

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