Dollar Lifts Gold Price

NEW YORK (TheStreet) - Gold prices get an afternoon lift from the U.S. dollar.

Gold prices maintain it's inverse relationship to the U.S. dollar. The U.S. dollar index hit a 3 1/2 month high Tuesday which pushed prices firmly under $1,100. On Wednesday, the dollar was losing ground falling .61% to $77.82 which caused gold to pop $7.40 to $1,094.10 an ounce. Volatility is expected to continue until 2010 on light volume and more long selling. "In the run-up to year-end we expect gold to see further pockets of long liquidation, potentially pulling back to the $1,050 area" says James Moore, analyst at thebulliondesk.com in his daily metals report.

Gold delivery for February, the most actively traded contract, has traded as high as $1,096.80 and as low as $1,080.10 at the Comex division of the New York Mercantile Exchange. Silver prices were rising 15 cents to $17.18 while copper was up 6 cents to $3.20.

Mining stocks, a more leveraged way to invest in gold, were surging. Barrick Gold(ABX) and Newmont Mining(NEM) were up over 3% at $40.69 and $48.19 respectively. Shares of Randgold Resources(GOLD) were rising 2.50% to $81.95 even after the stock was downgraded from buy to neutral at Goldman Sachs. Goldman also initiated Harmony Gold(HMY) and Gold Fields(GFI) with buy ratings. The stocks were trading higher at $10.04 and $13.40 respectively.

Shares of SPDR Gold Shares(GLD) were rising .87% to $107.08.

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--Written by Alix Steel in New York.

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