Well, first it's important to understand that most people mistakenly think gold is a hedge against just inflation, but in fact it is also a hedge against financial uncertainty, which is why it held up relatively well during last year's collapse for most other commodities.
Right now, gold is moving on what looks to be a lot of the same emotional and speculative momentum that carried oil, or treasuries to bubble highs. Today's big purchase by India was an external factor, as opposed to a fundamental factor for gold. It's definitely starting to smell like emotional factors driving things now, and I'm sure that today's action will help make the amateurs want to pile in even more and chase the rally.
Combine that with the non-confirming action in silver and mining shares, and you have a combination that is dangerous over the near term. If we do get a bubble move, I'd expect it to come over the next several weeks.
