Dubai Rattles Gold Prices

NEW YORK (TheStreet) - Gold is no longer a safe haven asset. Dubai debt weighs on prices.

On Friday, gold prices took a beating down over $20 during the shortened trading session. Investors moved out of risky assets on fears that Dubai could possibly default on $59 billion worth of debt. Gold should be bought as a safe haven asset in times of financial crisis but instead investors fled to the U.S. dollar, "when panic hits -real panic- the 'safe-haven' quest among the panicked, reverts back...to the dollar" says Jon Nadler, senior analyst at Kitco.com in his daily metals report.

Futures are more upbeat Monday as the immediate threat of Dubai debt dissipates after the United Arab Emirates announced fresh funding to banks. A weakening U.S. dollar and bargain hunting supported gold prices even as they fell from their most recent high of $1,191 an ounce. "The yellow metal appeared to manage to hold support at the $1168 trend line" says Nadler.

The U.S. dollar index was slipping slightly to $74.84. Gold delivery for February was falling $6.00 to $1,169.50 an ounce at the Comex division of the New York Mercantile Exchange. Gold prices have traded as high as $1,185 and as low as $1,165.

Silver prices were slipping 12 cents to $18.21 while copper was adding 1 cent to $3.13.

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Mining stocks, typically seen as a leveraged way to invest in gold, were struggling. Barrick Gold(ABX Quote) was trading at $42.51 while Newmont Mining(NEM Quote) was slipping 1% to $52.87.

Shares of Freeport McMoran Copper & Gold(FCX Quote) were falling 1.28% to $83.12 after Goldman Sachs removed the stock from its Conviction Buy List. Yamana Gold(AUY Quote) was relatively unchanged at $13.08.