Gold Price Pops on Dollar Drop

NEW YORK (TheStreet) -- Gold prices pop in the New Year.

Gold prices continue their inverse correlation to the U.S. dollar as trading resumed in full force Monday. Gold ended 2009 just under $1,100 settling at $1,095 an ounce as the precious metal locked in a 24% gain for the year. "We're starting off very strong [in 2010]....We've got all the technicals back that we were looking for", says George Gero, vice president of global futures at RBC Capital Markets. "We've higher open interest and higher volume....We're back to $1,100 on the low side and probably $1,200 on the upside for this year."

The U.S. dollar index was slipping .61% to $77.39 pushing gold prices higher by $26.60 to $1,122.80 an ounce at the Comex division of the New York Mercantile Exchange. Gold delivery for February, the most actively traded contract, has traded as high as $1,124.60 and as low as $1,093.80. A stronger than expected nonfarm payroll report on Friday will boost investor confidence in an economic recovery which could strengthen the U.S. dollar and put pressure on gold prices. Gero says gold could see some short term pressure but he thinks any negativity is already priced in.

Silver prices were rising 55 cents to $17.39 while copper prices were up 6 cents to $3.41.

Mining stocks, a more leveraged way to invest in gold, were rising along with broader equities. Large cap miners Barrick Gold(ABX) and Newmont Mining(NEM) were up over 3% at $40.78 and $48.88 respectively. Freeport McMoran Copper & Gold(FCX) was soaring almost 4% to $83.18 while shares of IAMGOLD(IAG) were rising 3.52% to $16.19 after reports that CEO, Joseph Conway, will be leaving in mid-January. A search for his replacement is underway.