-->The Roman poet Aurelius Clemens Prudentius observed almost 1,600 years ago that"the hunger for gold is made greater as more gold is acquired". He could easily have been describing today's gold market as burgeoning demand for the precious metal has driven prices ever higher, spurring more demand. With the price for gold soaring, it seems to be cropping up everywhere, especially in hedge fund managers' portfolios. Increasingly, hedge fund investors have seen from quarterly reports that funds they have invested in have placed substantial bets on gold. As the markets have become more compelling, even some mainstream hedge funds have begun to get into the act. At the same time some firms have launched gold-oriented hedge fund products, including Tocqueville, Barclays, EFG private bank and Liberty Ermitage. It's easy to understand what's behind this sudden interest. This year, gold has surged from roughly $340 an ounce to more than $38 0, meaning even higher returns for investors in the inherently leveraged futures and options on the commodity. Mining stocks, with their benefits of operational gearing, have also performed spectacularly well, with the Amex Gold Bugs index of gold mining stocks up over 90 per cent from its March lows. What is more complicated is divining what is driving the recent move and whether the trend is sustainable. Many hedge funds who have delved into gold this year have used the commodity to express a fairly simple view: that an ever-expanding money supply, low interest rates and tenuous economic growth would conspire to debase the US dollar, and historically the dollar and gold have been negatively correlated. So far, that bet has paid off (FT.com)