Gold Up as Dollar Slips

NEW YORK (TheStreet) -- Gold prices were rallying Monday as they resumed their inverse correlation to the U.S. dollar.

Gold for February delivery was rising $7.20 to $1,096.90 an ounce at the Comex division of the New York Mercantile Exchange. Prices have traded as high as $1,104 and as low as $1,092.20. The U.S. dollar index was falling 0.05% to $78.24, prompting gold to test the $1,100 level.

Dollar-based commodities like gold are cheaper to buy in other currencies as the dollar heads lower. Prices have found support around the $1,080 level as bargain hunters look for buying opportunities. Many analysts believe that gold prices might come under more short-term pressure as risk appetite wanes. Questions over Federal Reserve Chairman Ben Bernanke's re-election as well as continuing credit-tightening fears out of China could put pressure on the precious metal.

"Could we go back to testing some of the averages? We're way ahead of the 200-day average, which is just over $1,000 [an ounce]," says J.C. Doody, editor of goldstockanalsyt.com. "I think we can bounce around in this current area for a little bit until we get direction, and what that direction will come from probably is going to be a weaker dollar ... in the short term there are plenty of good stocks out there. This represents a good buying opportunity for the right stocks."

Silver prices were rising 14 cents to $17.08 while copper was up 4 cents to $3.38. Platinum was sinking $8.30 to $1,536 while palladium was sinking $5.80 to $434.30.