Investors fled the dollar and bought riskier assets like commodities and equities as Dubai debt fears dissipated. Dubai is currently working with lenders to restructure half of its $60 billion debt which reassured investors that the problem would be contained and not spill over to other markets.
Gold for February delivery was soaring $20.40 to $1,202.40 an ounce at the Comex division of the New York Mercantile Exchange. Prices have traded as high as $1,204.00 and as low as $1,176.40.
Silver was rising 70 cents to $19.23 while copper prices were up 5 cents to at $3.23.Gold prices had been running out of steam, leading some analysts to anticipate a deeper correction, but the weak U.S. dollar pushed prices higher. "I think over the next 60-90 days, I don't think it's unreasonable to assume that $1,250 could be another possible target," says Brian Hicks, co-manager of the U.S. Global Investors Global Resources Fund. "We still haven't hit the prior lows for the U.S. dollar. ... I think if we get to that level I think we could see gold somewhere between $1,250 and perhaps even $1,300." The U.S. dollar index was falling 0.66% to $74.30. Mining stocks, viewed as a riskier, more profitable way to invest in gold, were popping. Barrick Gold (ABX - Get Report) was rising 7% to $45.48 after the company announced it was completely de-hedged and fully leveraged to gold's spot price. Barrick, however, still has a $700 million obligation associated with its remaining floating contracts. Another big cap miner, Newmont Mining (NEM), was up 4.23% to $55.91. Shares of Freeport McMoran Copper & Gold (FCX - Get Report) were adding 2.23% to $84.65 while Yamana Gold. (AUY - Get Report) was rising 4.28% to $13.90.