Uh oh. Gold's near $1,000

(CNNMoney.com)
With gold nearing last year's highs, it's a cause for concern. But it is probably more a sign of long-term inflation worries than fear of another financial collapse.

NEW YORK (CNNMoney.com) -- Are gold investors starting to sense something wrong that others are missing?

The price of gold is nearing $1,000 an ounce. It closed at $997.70 Thursday, up $19.20 from Wednesday. This rise might be a cause for concern.

In the past two years, gold has flirted with the "box of ziti" level -- a bit of slang for $1,000 from a memorable "Sopranos" episode -- a couple of times. And that usually has coincided with a time of immense strain in the markets

Gold hit a record high of about $1,014 in March 2008, just when Bear Stearns was on the verge of collapse before being "rescued" by the Federal Reserve and JPMorgan Chase (JPM, Fortune 500).

A couple of months later, gold got close to $1000 again due to worries about inflation and a weak dollar. Gold's rise matched oil's march to a record high.

Finally, gold got close to $1000 again in late February of this year, a time when investors were fretting that big banks such as Citigroup (C, Fortune 500) and Bank of America (BAC, Fortune 500) might need to be nationalized.

So what's driving the gold rush this time around? It is hopefully something less sinister than fear of imminent financial doom.

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.

"There hasn't been too much big news driving up gold prices. There is no major catalyst," said Kathy Lien, director of currency research at GFT, a foreign exchange and futures brokerage firm in New York. "I don't think it's a fear of instability in the financial sector. It does reflect skepticism about the strength of the global recovery."

Lien added that in light of how much money has been pumped into the financial system by the Federal Reserve in the past year, some investors may also be worrying about the dollar weakening again. That could drive up prices and cause investors to rush for tangible assets, such as gold, as a safe haven.

"It's prudent for investors in general to increase their exposure to gold given the risks of inflation in the future," Lien said.