Gold Price Hovers Near New Record

NEW YORK (TheStreet ) -- Gold prices hit another record high supported by strong investor demand and U.S. dollar volatility.

Gold prices rose as high as $1,123.40 before slipping back to $1,113.20 in recent trading at the Comex division of the New York Mercantile Exchange.

Silver prices recently traded 10 cents lower at $17.43, while copper was relatively unchanged at $2.95.

The U.S. dollar index rebounded from a 15-month low adding .57% to $75.50 and prompting some investors to sell gold. The key is to monitor the DXY U.S. Dollar Index Future to see if it falls from the $75 level after the recent rebound, James Moore, analyst at thebulliondesk.com, said in his daily metals report. "If [the DXY] fails or extends lower we could easily see gold push on to new highs above the $1,150 level," Moore said. But if the dollar index holds at higher levels that could spark a correction for gold and equities, he said.

Remarks from Barrick Gold(ABX Quote) CEO Aaron Regent also anticipate a short-term correction. "There is no reason we should expect gold not to sell off, " Regent said in the The Financial Times. "It is a commodity like any other." Regent also said global output is falling. This could result in a gold supply crisis especially as investor demand increases. Joe Foster, gold strategist for Van Eck Global, said that global mine production has been in a "grinding decline since 2001 so I suspect gold production going forward to be flat." Growth for larger mining companies is coming from the acquisition of smaller companies that have found significant deposits, Foster said. The strategy for many smaller companies is "to find something that is big enough that is attractive to the bigger companies," he said.