Gold has been lingering around the $1,335 per ounce for the past several weeks. This prompted many hedge funds to sell their holdings.

Then came the turmoil in the Mideast. First Tunisia and Egypt, now Libya, Bahrain, Yemen and others. That was the catalyst that gold needed. It shot to a new record high of $1,432.10 in the spot market. April gold futures settled at $1,431.20 per ounce, as reported in Reuters.

SPDR Gold Trust (GLD) closed at $135.41. Middle East violence has resulted in gold rising above $1,407 an ounce. GLD overall option implied volatility of 17 is below its 26-week average of 20, according to Track Data, suggesting decreasing price movement.

Financial Select Sector (XLF) overall volatility at 22; 26-week average is 24.

ISE Sentiment Index-ISEE closed at 114; 10-day moving average is 132.

Options Update is by Stock Specialist Paul Foster of theflyonthewall.com.

Barrick Gold Corp. (ABX), which is the world's largest gold producer, continues to pump out strong profits. According to the latest quarterly report, net income came to 90 cents a share, up from 21 cents in the same period a year ago. Revenues were up 25% to $2.95 billion.

On an adjusted basis -- such as by excluding one-time items -- earnings were 95 cents. The Street consensus was for 87 cents.

China is allowing its citizens to buy physical gold bars. This new program is unleashing an unbridled demand for the metal. The program works this way: The Industrial & Commercial Bank of China (ICBC), China's largest, sells the bars to customers at real-time prices. Persons who own the bars can resell them to the bank.

To give you an insight into the magnitude of these sales, here are a few statistics. The ICBC sold 7 tons of bullion in January alone. In all of 2010, sales were only 15 tons.

The trends that drove gold prices higher in 2010 are still in place. In the U.S., the Federal Reserve is buying $600 billion in treasuries in an attempt to keep interest rates low. Low interest rates encourage higher gold prices.

In Europe, the situation is still unstable. The European Central Bank (ECB) has stepped up its purchases of member nations' bonds. Spain is still on the table as a country teetering on verge of a bailout. Until the European mess is settled, gold remains a surrogate currency.

Gold prices have marched to a new high of $1,422.45 per troy ounce in London. This marks the fourth day of the gold rally.

The Wall Street Journal (subscription required) cited that the prime mover was continued worry over European sovereign debt defaults.Traders and investors are riding the bull higher and higher. To help the gold along, the U.S. dollar is weaker, sparking a rally in key commodities like oil and grains. Cotton is also up again.

Gold shot past $1,400 per ounce to $1,410.4 on the December contract. Triggering the move were worries about sovereign debt levels in Europe and uncertainty concerning the upcoming G-20 meeting, as the Wall Street Journal reports.

First to Europe. The cost of insuring against defaults in countries like Ireland, Portugal and Spain has increased. Ireland's debt, in particular, is causing concern. Interest rates on Irish bonds has risen to 7.8% against Germany's 2.5%.

Precious metals moved higher today, led by gold, which set another record high. Here are the numbers:

• December gold futures are trading at $1,328.20, per ounce, up $11.40 (as of 8:00 am EDT)
• December silver is up 23 cents to $22.27 per ounce.
• October platinum is trading at $1,681.7 per ounce, up $14.
• December Palladium is up $7.20 to $568.50 per ounce.

Starting next month you will be able to buy gold at an ATM machine. Can that be true? Yes, CNNMoney's story on Gold to go's owner Thomas Geissler says he plans to launch two such ATMs in Las Vegas and Florida. Plans are to expand the Gold to go ATMs in New York, Dallas, Los Angeles and Minnesota.

The machines will offer gold coins and bars weighing up to 8 ounces. Prices are updated every ten minutes based on spot gold prices.

Spot gold in London hit $1,299.65. The December gold futures contract traded at $1,301.30, setting new record highs, as reported in Reuters.

Gold resumed its rally mode when the U.S. Federal Reserve indicated that it will provide more stimulus to the U.S. economy. That triggered commodities to move higher in anticipation of more inflation.

Gold set a new record high in London, trading at $1,277.07 per ounce, Bloomberg News reported.

The reasons for gold's surge are both technical and fundamental. On the technical side, when gold broke through the old high at $1,265 per ounce, it was a signal to traders to buy. Usually when a new nigh is made, the bulls take charge of the market.

Gold prices are on the move today, rising sharply and setting a new record high as traders look to the precious metal as a safe haven in an uncertain global economy.

Gold prices are currently up $25.90 to $1,271.50 an ounce, just a bit shy of the record high price of $1,274.50 it set earlier in the day.

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."

Will gold rally to $1,500 per ounce? According to leading analysts, the answer is yes. Bloomberg News surveyed 29 analysts and their median number was $1,500 per ounce.

Dan Brebner of Deustche Bank (DB) was the most accurate forecaster this year. His prediction is also for $1,500 per ounce.

In a footnote in a 216-page report released last week, the Bank for International Settlements (BIS) disclosed that since December, it has taken in 349 metric tons of gold from central banks, which swapped it for $14 billion in cash.

Why is this important? First off, the BIS is the central bankers' bank. We can gather from this that central banks needed cash to pay their bills. So they pawned their gold.