Gold Weighed Down by Rising Dollar

NEW YORK (TheStreet) -- Gold futures were falling for the sixth time in seven sessions, as the U.S. dollar gained strength.

Gold for December delivery was down $10.70 to $1,036.40 an ounce at the Comex division of the New York Mercantile Exchange. The contract has traded as low as $1,035.40 and as high as $1,049.20. On Thursday, gold posted its best gain in several weeks due to short covering.

Silver for December delivery was off by 41 cents to $16.25 while copper was down 7 cents to $2.96.

Short Term Gold Correction

The U.S. dollar index was rising steadily from its 14-month low to $76.35 as the euphoria over third-quarter GDP growth in the U.S. subsided.

"[The dollar is] at the top of its downward channel and there is a possibility that it will break to the upside of that channel formation and if it does that... it will indicate that is has more strength than most of us think [for the short term]," says David Morgan, founder of Silver-Investor.com.

"So many people were so bullish on the gold market in the last month or two and the same thing with the stock market....I'm looking for a pullback in both the general equity market and in the metals market again on a short-term basis."

In mining stocks, shares of Agnico-Eagle(AEM) kept sinking after the company missed earnings expectations due to problems in some of its mines. The company cut gold production targets for 2009 and 2010. Stock received an upgrade to buy from neutral at UBS. Shares were down 8.6% to $52.54.