As investors attempt to make sense of a fast-moving situation in Ukraine, gold was rising 2 percent on Monday, and touching $1,350 per troy ounce for the first time since October.
Russia has dispatched troops to Ukraine's Crimean Peninsula, in an apparent violation of Ukraine's sovereignty that has put the United States and other nations in a tough geopolitical situation with few easy outs. The situation has led to a decline in the Dow and , and put a strong bid under the gold market.
(Read more: Russian markets hit as Putin tightens grip on Crimea)
"Gold is moving on global risks related to the invasion of Ukraine," said Jim Iuorio of TJM Institutional Services. "At this point, it seems that gold is pricing in a Russian occupation of Crimea. Any move higher in gold would be dependent on an escalation of the conflict."
Gold is traditionally viewed as a safe-haven asset that rises in value in times of turmoil. So as fear creeps into the market and the geopolitical landscape, it is natural to see gold move higher.
"Gold and the S&P have been trading in tandem for 10 to 12 weeks, and it kind of doesn't make sense to me that they've been trading like that," said Mihir Dange, a gold options trader with Grafite Capital. "Now you have a situation that heightens geopolitical risk, and it's creating this divergence between stocks and gold once again. Sometime you need some kind of an event to shake things up, and this could be it."
The Ukraine situation certainly appears to have spurred heavy interest in gold among investors. BullionVault, which bills itself as the world's largest online gold market, reports that on Sunday, there was more buying and selling of the gold in its vaults than on any Sunday since August.
At this point, a bet on gold appears to be a bet on the escalation of the conflict.
"Really for gold to go higher—and it's tough to say this—you'd need a further deterioration of the situation over there," said Anthony Grisanti of GRZ Energy, reflecting the views of many traders.
(Read more: Why Crimea matters)
"As a military confrontation seems imminent in Ukraine, we potentially will see a selloff of nearly everything which will in turn fuel safe haven trades," Jeff Kilburg of KKM Financial wrote to CNBC.com. "Gold will benefit tremendously from this sudden reaction."
On the technical side, Rich Ilczyszyn of iiTrader sees resistance at $1,352 and $1,361. And Dange says that once gold gets above $1,360, it is headed for the $1,390 to $1,410 range.
—By CNBC's Alex Rosenberg. Follow him on Twitter @CNBCAlex.
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