This isn't the first time I've warned investors like you about the gold bubble and what I believe will be its looming collapse. Admittedly, the spot price of gold has risen nearly 25% since I first called it a bubble, so it's possible it might still rise after you read this.

Be that as it may, I'm more convinced than ever that gold is a bubble that's set to burst.

You're right to ask why. Keep reading -- the answer will be clear in a few moments. First, let's look at why gold is still rising...

People are still scared about loose fiscal policy and the massive amount of debt governments incurred while saving the world from economic destruction. Legitimate concerns, yes, but they're not what's really pushing gold higher.

A recent story in Bloomberg Markets lays out the real history behind this unprecedented gold spike, which I want to share with you. Once you know the facts, I'm certain you'll be as convinced as I am that gold is an unsustainable bubble, and it's just a matter of time before it bursts.

You'll want some better alternatives for where to invest, which I'll also share at the end.

A desperate solution and its frightening consequences
Historically, panicked investors seeking gold had to buy it in the form of bullion bars or gold coins -- not an easy strategy. It meant high commissions when buying and selling, needing a storage facility and insurance plan, and knowing the right people to deal with.

With a few exceptions, this kept gold as a slow-moving market. Rightly so, since however you look at it, gold is just a shiny metal with no coupon rate or growth prospects.

That all changed in 2004.

Two years earlier, Christopher Thompson -- then-chairman of major South African Gold Fields (NYSE: GFI) -- took over as the chairman of the World Gold Council's executive committee.

At the time, the WGC was in a heated debate about whether jewelry was the best way to keep the price of gold moving higher.

But Thompson had another solution. He realized that a huge catalyst for the price of gold would involve the creation of an ETF backed by physical gold reserves, which could be traded by anyone with a brokerage account on the NYSE.

So in 2004, the SPDR Gold Trust (NYSE: GLD) went live. According to Financial Research Corp., it "attracted more investment for the month than all but two other funds offered on the NYSE, including mutual funds -- even though it traded for only eight days."

Thompson's solution was a success. In the year and half following the ETF's launch, the price of gold shot up nearly 60%.

Which brings us to today...
At the end of 2010, this ETF owned more than 41.4 million ounces of gold, giving it a market value of more than $58 billion. It's become the fastest-growing ETF in history.

But as we know, trees don't grow to the sky -- and prices don't go up forever.

This means the still-nascent interest in the fund will gradually come to a screeching halt, especially as the world economy continues smoothing out and the level of fear subsides.

And who will be left out to dry?

Some hedge fund stars like John Paulson and George Soros could feel some pain if the ETF heads south. Paulson & Co. owns more than $4 billion worth of the fund, and Soros Fund Management owns some $625 million (he also owns shares of competing ETF iShares Gold Trust (NYSE: IAU).) However, both have shown the exceedingly rare ability to effectively time the market.

On the other hand, according to BlackRock, "individual investors may hold as much as half of the gold in ETFs that specialize in the metal." According to Capital IQ, the asset management branches of both JPMorgan Chase (NYSE: JPM) and Bank of America (NYSE: BAC) own more than $1 billion and $2 billion worth of this ETF, respectively.

So it's individual investors who will get demolished when gold prices come back down to earth.

That is, if you don't act quickly -- or smartly
If you are one of the many who own shares of the SPDR Gold Trust, my personal suggestion is to sell shares.

There's a better way to mitigate risk -- with a commodity that is completely overlooked right now.

And that's with natural gas. Even as credit concerns faded and every asset class has risen, natural gas has been stuck around $4 per thousand cubic feet since late 2008.

One way to play what I believe will be the commodity's inevitable rise is via the United States Natural Gas Fund (NYSE: UNG), which seeks to mirror the move of natural gas.

But I think the smartest way to play this commodity would be by investing in Ultra Petroleum (NYSE: UPL). This exploration and production company owns first-rate natural gas assets with huge potential, has a returns-obsessed management team, and keeps its balance sheet conservatively leveraged. Even better -- its stock has been as flat as the price of natural gas since late 2008.

The company was pointed out to me by Tom Jacobs, the advisor of Motley Fool Special Ops, a focused portfolio service that seeks out underfollowed stocks, turnarounds, deep-value plays, or other special situations. Tom and his team of expert equity analysts believe Ultra Petroleum could be worth nearly double what it is today.

If you want to see three more of Tom's favorite special opportunities today, just enter your email address in the box below for special access to his video analysis as well as the opportunity to join Special Ops when the high-demand service reopens for a limited time this month.

Adam J. Wiederman owns no shares of the companies mentioned above. BlackRock is a Motley Fool Inside Value recommendation. The Fool owns shares of JPMorgan & Chase and Ultra Petroleum. Through a separate Rising Stars portfolio, the Fool is also short Bank of America. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.