Gold may soon hit $1,000 an ounce, but will rally fizzle this fall?

Gold is the financial world's answer to Prozac: it's economic medication that relieves anxiety about the future. As the precious metal approaches $1,000 an ounce, some investors may wonder if the economy is off its meds.

Markets have tested the $1,000 level for several days and may finally cross that Rubicon today, as signs of the recovery are not as robust as investors would like them to be. (U.S. employers shed 216,000 jobs last month -- beating expectations, and the 247,000 jobs slashed in July.)
Worries about the strength of the global recovery has pushed gold up 3.5 percent this week. More remarkably, this gold rush isn't being driven by fundamentals; the World Gold Council estimates that demand for gold jewelry from India, the world's biggest gold consumer, slumped 52 percent in the first quarter and 31 percent in the second.

"It simply may just be traders looking to hedge their bets a bit, as investors begin to worry if the stock market rally that began in March has come too far, too fast," CNN/Money speculates. Kathy Lien of currency trader GFT goes further, arguing, "There hasn't been too much big news driving up gold prices. There is no major catalyst."

But that may change in the coming months, as newly confident consumers ratchet up their jewelry purchases around the holidays. Luxury retailer Tiffany & Co. (TIF) recently beat second-quarter expectations and raised earnings guidance. The SPDR Gold Trust ETF (GLD) is up more than 12 percent this year.

Some pundits predict tumbling gold prices, if the economy improves and investors no longer view gold as a necessary safe haven. Then again, other experts are arguing that now is the time to invest in it. The gold market is that simple -- and that complicated.

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