Gold prices continue to defy gravity and barreled past the psychologically important level of $1,500 per ounce in intraday trading on Tuesday. It briefly hit $1,500.50 and settled at $1494.50. Both figures are record highs.

Gold’s most recent run was triggered by Standard and Poor’s lowering of the US credit rating outlook, implying that the country was in danger of losing is AAA ratings sometime in the future.

In 2011, such concerns stemmed from Washington politicians' inability to overcome their differences and articulate a credible medium-term plan for debt reduction.

The fear is that the indebtedness may push the US government to devalue the dollar and inflate its way out of the debt burden.

Before 2011, gold’s phenomenal rally was largely driven by the loose monetary policy of the Federal Reserve and other central banks around the world.

Loose monetary policy makes fiat currencies more amply available, thereby making individual units of them less valuable relative to finite commodities like gold.

In the post-financial crisis world, gold is considered by many to be a hedge against US dollar devaluation.  So as long as enough people doubt the soundness of the US dollar, gold will likely climb to new heights.