Gold closed at a new record, but didn’t hit a new record. The actual “record” is $850 set in January 1980. But the highest close was $825, set on that same day as the all-time record. Gold closed $8 over the old record today.

Inflation adjusted, we’d have to be at around $2000 an ounce to actually be breaking a “new” record (the same way crude has to be at $101 a barrel to actually hit a new record.)

What does this mean for gold? Not much. Suddenly some people are starting to notice it. I heard it mentioned on the radio this morning before the markets opened. That’s a first. But it’s not like it’s on everyone’s breath- not yet anyway.

For gold investors, that’s a good thing. It’s still a contrarian play (despite its big run-up.) The mainstream investing public has no clue that gold has been on a tear. They’re starting to hear more about it- but they’re still not investing in it. Not yet.

But eventually- they will.

Gold is moving higher as the dollar gets crushed. This is not a surprise. Gold is also an inflation sniffer. When it sniffs it, it goes higher. The smell must be pretty darn strong right about now.

I suspect we’ll see quite a few more “record highs” before this commodities bull is done running.

Hang on for the ride!

I bet you know what Google is trading at these days. Or how about oil? If you watch CNBC, you can see it highlighted in yellow on the upper ticker - as it flashes its new record highs seemingly every day.

What about the price of gold. Do you know what that is?

Ever so quietly, gold has been moving towards its all-time high, around $850 an ounce set the last time crude was at records in the early 1980s.

Coincidence? I think not.

Gold moved as high as $798.30 on Monday- just shy of the important psychological $800 an ounce barrier. It might take several sessions to actually close over that number. But it will eventually take that level and then move even higher.

But if you looked at most of the investing websites such as CBS Marketwatch, CNNMoney or Yahoo Finance, you wouldn’t have known that gold was at another new 28 year high. Nope. You would have had to go to other pages on those sites to seek out the information (for instance- by clicking on the “markets” page on CBSMarketwatch and going to the articles on metals.)

It is a strong bullish indicator that no one cares what gold is doing. When no one cares- sit up and take notice.

Gold is up 20% over the last two months. The gold stocks haven’t been doing quite as well. They are trailing the returns of the actual metal so far this year but they won’t trail it for forever.

Do you know anyone buying gold right now? I don’t. I don’t know anyone even buying the gold stocks. They’re all obsessed with Google, Apple, RIMM and their ilk. Make no mistake, those are all fine companies and have been excellent investments. But an obsession with one sector means that there will be opportunity in another.

When will the markets notice gold? Probably not until it’s over $800 - and then some analysts will be on tv saying it’s a “bubble” or some such hogwash like that (as gold isn’t even close to its inflation adjusted high of the early 1980s- which would be something like $2,000 an ounce.) And then once it’s over $800- everyone will ignore it again.

Because you can’t make any money off of gold, right? It’s been a “dead” investment for 28 years. Or so the “experts” say.

Gold price in 2001= $255 an ounce
Current gold price= $792.60 an ounce

Yep. No one is making any money off of that investment.

Watch gold.

You can buy gold through various ETFs, including tracking the actual metal (ticker GLD) and through the gold miners ETF (GDX)- which also owns a few silver companies for good measure.

What if I told you that there was a mutual fund that has had the following rate of return over the last several years:

Year to Date: 12% versus 9% on the S&P 500

Last Year’s Return: 39%

And an Average Annual Rate of Return of 27% versus only 14% for the S&P 500.

You would think most investors would want to invest in a mutual fund with these kinds of returns, right?

You would be wrong. This fund, the Tocqueville Gold Fund (TGLDX) only has $1.1 billion under investment.

In the realm of mutual funds, a billion dollars under advisement is pretty much nothing.

But how could it be that investors aren’t throwing their money at this gold fund?

Investors are still leery about the metals sector. Either they don’t understand it or they mock it. As John Hathaway, Tocqueville Gold’s manager recently said in a Barron’s interview:

Here you have an asset class that has been outperforming for some time, and yet it is still treated skeptically. What do you make of that?

Gold’s bubble lies ahead. It has got a long way to inflate. So much about gold has very little to do with gold. It is more about capital-markets psychology. If we are entering a period of difficult markets, which was averted from happening earlier because the Fed pulled this 1% short-term money stunt and bought us a few more years, it is going to change psychology, and that will open the door for more people thinking about gold. What was needed to put gold in overdrive was the scent of fear.

His most interesting comment: That gold’s bubble still lies ahead. This is absolutely correct.

There will be a mania for the metals at some point in the future. I don’t know how soon it will get here. It’s not here yet (as is evidenced by the paltry billion dollars invested in his outstanding fund.)

Gold is still a contrarian investment. It doesn’t become a bubble until everyone is in it. We are a long way from that. People will still mock you if you say you own gold or gold mining stocks.

When gold has respect, that’s when this bull will be over.

Watch the Yellow Metal.

They don’t call them “precious” for nothing. While the stock markets have been having convulsions over the credit crisis, gold has been meandering between $650 and $700. It sold off last week as the stock market did- but it wasn’t a huge sell-off.

Gold and silver will provide safety for many investors in the coming months. Mark O’Byrne, Director of Silver & Gold Investments said in an article on CBSMarketwatch:

“During the Wall Street crashes of 1929 and 1987, gold also fell in price during the actual days of the stock crashes but sold off by less than stocks and very soon recouped the initial losses and then surpassed its recent highs.”

If the dollar continues to sell-off, you will see a flight to the safety of gold.

Silver has also been hovering close to the $13 level for quite some time.

How do you invest in these sectors? There are gold and silver ETFs where you can own the commodity directly- the Gold ETF (GLD) and the Silver ETF (SLV). Or you can buy the gold miner index ETF ticker GDX. Some of the natural resource mutual funds or metal mutual funds have seen great returns in recent years. They likely own a combination of gold and silver companies.

The gold mutual funds aren’t doing all that great so far this year. For instance, the Tocqueville Gold Fund (TGLDX) is up less than 1% for the year.

But watch for gold and silver investment to pick up in the future. In times of market volatility and inflation, investors will be flocking to the certainty that is the yellow metal.