Gold futures have continued their quest for all-time highs today, and options players are reacting by opening new bullish bets on stocks within the precious metals sector. One such equity is Yamana Gold (AUY), which saw call volume ramp up to more than double its daily average by midday.

Within the first couple hours of the session, about 24,000 calls changed hands on AUY, easily outstripping its average daily volume of roughly 11,000 calls. The most active strike today is AUY's January 2011 15 call, with 4,079 contracts trading. The majority of these calls traded at the ask price, indicating they were most likely purchased. Not far behind is AUY's April 2011 20 call, where 2,774 contracts crossed the tape -- 78% at the ask price.

Put volume skyrocketed Tuesday on Newmont Mining (NEM), with roughly 22,000 contracts crossing the tape within the first 90 minutes of the session. By contrast, NEM was only expected to see about 1,800 puts change hands -- so this surge represents about 12 times the norm.

The equity's November 60 put is far and away the most active. By 11 a.m., this out-of-the-money strike had already seen in excess of 13,200 contracts exchanged, with 59% of these puts trading at the ask price. Implied volatility on this back-month option has climbed by 2.6 percentage points to 35.2%, so it seems likely that buyers are driving the bulk of today's volume.

Higher prices are not keeping gold buyers away in India. This year it is estimated that India will buy between 600 to 625 metric tons of the precious metal, up fromm 480 to 485 tons last year, according to the National Spot Exchange Ltd, a reported by Bloomberg. This year's purchases will make India the world's biggest consumer of gold.

According to the World Gold Council, India's bullion demand almost doubled in the first half of this year. Anjani Sinha, CEO of the nation's'biggest bourse for trading physical gold said: "This level of prices is already accepted, so during this period compared with last year, the demand will be higher."

On Monday spot gold was quoted at $1,182.46 per ounce, after hitting a 2010 high of $1,182.95.

The key to the spike was the lack of confidence in the Greek debt bailout of $147 billion. While the aid package will halt the present debt problems in Greece, investors are looking forward, over the long term, and still see difficulties for the eurozone.

Gold rallied sharply on expectations the the Fed would leave interest rates low. Here are the latest precious metals prices (as of 10:15 am EDT):

• June gold futures are up $6.60 to $1,142.60 per ounce.
• May silver is up 19 cents to $18.130 per ounce.
• June palladium is up $1.50 to $510 per ounce.
• April platinum is up $14.40 to $1,712.90 per ounce.

Gold futures are on a tear. According to the Wall Street Journal (subscription required), December gold futures rose $10.90 to close at $967.50 per ounce. Yesterday's high was $972.70, its highest mark since June 5.

The market moved up when buy stops were hit at $960 and $961.965 in the spot market and $963 on the Comex. A "buy stop" is an order to buy above the current price. Traders often place "buy stops" to test the upward momentum of the market or they use specific chart points that signal a turning point in the market. If the stops are hit it usually means that a trend is in place, in this case an uptrend.

Will we have enough gold to meet demand in the near future? In 2001, gold dropped well below $300. As a result, exploration budgets plummeted in 2002. The results of that decline are being felt now -- according to GFMS Ltd., 2006 global demand for gold was pegged at 3,380 metric tons, while worldwide production fell 3% to 2,471 tons.

In 2006, the metal hit a high of $730 a troy oz. and, so, not surprisingly, 2007 exploration investment now tops $3 billion, according to the Metals Economic Group. Given the lag between exploration and production, this increase won't impact supplies for some time.

Also, as mines in stable countries play out, companies are forced toward exploration in higher-risk countries. This, along with climbing energy costs, has resulted in an increase in production cost for gold worldwide of $45 per ounce, according to GFMS Ltd. Consolidation of exploration companies has also had a dampening effect on gold exploration.