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Gold Prices Shatter $1,200 Mark

NEW YORK ( TheStreet) -- Gold prices shattered the $1,200 an ounce mark on their way to a new record high Tuesday, as risk appetite returns.

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.

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