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Gold Prices Dip as Euro Firms (Update 1)

Updated from 10:36 a.m. ET with settlement prices

NEW YORK ( TheStreet) -- Gold prices dipped on Monday with investors growing timid as the euro showed some strength.

Gold for August delivery settled down $6.50 to $1,597.90 an ounce on the Comex division of the New York Mercantile Exchange. The gold price traded as high as $1,603.60 and as low as $1,587.40 an ounce during the session, while the spot price was falling $2.60, according to Kitco's gold index.

"I think today is just a consolidation of the euro gains -- can they hold it, or does it slip -- and that's putting a little bit of pressure on gold as the U.S. dollar goes up a little bit," said Jeffrey Wright, managing director of metals and mining at Global Hunter Securities.

Silver prices for September delivery dropped about 11 cents to settle at $27.50 an ounce, while the U.S. dollar index was climbing 0.33% to $81.86.

Yoni Jacobs, chief investment strategist at Chart Prophet, said he thinks that investors are watching out for tensions in the Middle East, a possible China slowdown and U.S. stimulus for long-term gold stability.

But uncertainty with U.S. elections in November could be a big issue for gold prices.

"I think we're going to see a sideways move in the long-term ... but with the election year I think a lot of people are pushing their decisions off, their pushing off a lot of assessments on the economy because it's harder to make big decisions -- especially for the Federal Reserve," said Jacobs.

Trading in the metals markets could be weak until Thursday when the European Central Bank's rate decision is due. The monthly U.S. jobs report due Friday is being closely watched as well with investors standing ready to parse what it means for the chances that the Federal Reserve will launch QE3 -- a move that would likely lead to a spike in gold prices.

Wright added that the uncertainty of the so-called fiscal cliff looming at the end of the year could send gold to $1,700 an ounce in the fourth quarter with the partisan divide created by the U.S. presidential election complicating the chances for compromise.

Gold miners were mixed on Monday as Eldorado Gold (EGO - Get Report) was higher at $12.63, up 30 cents, or 2.5%, while Newmont Mining (NEM) was sinking to $48.03, down 54 cents, or 1.1%.

Barrick Gold (ABX - Get Report) was at $37.32, down 29 cents, or 0.8%, while Kinross Gold (KGC) was at $8.32, up 17 cents, or 2.1%.

-- Written by Joe Deaux in New York.

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