Mining Stocks Winners & Losers: Gold

Udpated for stock and gold price movements

NEW YORK (TheStreet) -- Shares of gold-mining companies rose sharply Tuesday morning after the precious metal broke $1,000 an ounce intra-day for the first time since February -- but the sector trended into the red later in the session after gold failed to hang on to that psychologically rich level.

On the New York Mercantile Exchange, gold futures for December delivery, the most active contract, retreated in the afternoon, settling at $997.30 a troy ounce after earlier reaching $1,009.70 -- its highest point since surmounting $1,033 in March 2008.

Gold prices have risen sharply since the middle of last week on worries about the sustainability of the long summer rally in equities and on fears of inflation and a weakening dollar.

Indeed, the U.S. dollar index -- a measure of the value of the greenback against six foreign currencies -- fell almost 1% to 77.32 Tuesday afternoon, moving near a barrier that some traders have seen as an important mark. As the dollar sinks toward 77, "the inflation argument starts to get stronger," said Darin Newsom, senior commodities analyst at DTN. "Then you'll see money rolling into gold and crude oil as an inflationary hedge."

In March 2008, when gold touched that $1,033 high, the dollar index fell to 70.698, its lowest point since the gauge was introduced in 1973.

Shares of gold extractors and producers had turned mostly red by Tuesday afternoon. Barrick Gold(ABX Quote) stock, for instance, which jumped as much as 5% not long after the open, was trading at $39.24, off 2%. Goldcorp(GG Quote) also slipped late in the session, trading at $40.94, down 1.5%.

Other early gainers also gave back their advances. Kinross(KGC Quote), whose stock jumped 6% in the early going, was down 0.14% to $21.85. Yamana(AUY Quote), which had enjoyed a similar percentage uptick in the a.m., was trading down 1.4% at $10.48 in the last hour of the regular session. Agnico-Eagle(AEM Quote), meanwhile, fell 2.2% to $65.75.

Elsewhere, shares of Newmont Mining fell 1.2% to $45.68 after the Denver-based producer said it received a 20-year land-use permit for a big copper and gold mine in Indonesia, relieving concerns made public by the company that it might be forced to end production at the mine by 2010.