Why are gold prices rising?

Because after topping $1,000 an ounce in Mid-February, the price of gold bullion to $940 Monday. This is very close to a brand of technical support at $935. Yet another layer at $900 which should keep it lowing much longer. Despite the lull these are very relatively high prices historically, yet as we face the threat of substantial global inflation as a result of recession fighting, gold's upside is enormous. Adam Sauss, a co-manager of Appleseed Fund (AAPLX), a diversified fund with a significant state in gold, says all the steps governments are taking to fight the downturn will lead to inflation. "In fact, if you think of the ultimate way out of the housing mess, it is to devalue the dollar to get housing prices up again," he says.

Strauss is no gold bug or hard-money zealot; his fund bills itself as "socially responsible," and he says he favors investments "that allow shareholders to sleep well at night." Gold fills that bill. Appleseed bought its stake because its managers believed "gold was undervalued, and we still do, which is why we continue to own it," Strauss says.

A weakened dollar is gold's best friend. Assuming the price doesn't fall significantly below $900, "then we will start heading up again, and if we can get firmly above $1,000, I think we could run anywhere between $1,200 and $1,500" an ounce, says Mark Arbeter, the chief technical strategist for Standard & Poor's.

"Of course, some of this has to do with the action of the stock market," he adds. "The weaker the Stock Market is, the better gold will perform."