Gold Breaks $1,100

NEW YORK (TheStreet ) -- Gold prices were rising Tuesday as the U.S. dollar continued to struggle.

Gold for April delivery was rallying $12.50 to $1,117.50 an ounce at the Comex division of the New York Mercantile Exchange. Prices have traded as high as $1,119.90 and as low as $1,099.50. The U.S. dollar index was slipping 0.23% to $79.01.

Adding to dollar weakness was the news that the Reserve Bank of Australia held interest rates steady at 3.75% after most analysts predicted the central bank would raise rates. Lower global interest rates increase the likelihood of inflation which is bullish for gold prices as investors buy the precious metal as an alternative asset.

China Will Drive Gold Prices

"I think gold in the next week or so will trade between $1,100 and $1,145 [an ounce]," says Jeffrey Nichols, Managing Director of American Precious Metals Advisors. "Near $1,100 we've seen in the last week more buying coming from the Asian markets ... ahead of the Chinese New Year ... [which] triggers buying not just of investment products but also jewelry."

Silver prices were rising 8 cents to $16.74 while copper was up 1 cent to $3.09. Platinum and palladium were conservatively stronger at $1,579 and $443, respectively. Many analysts speculate if investment enthusiasm has tired out after the initial excitement over the first two U.S. physically backed platinum and palladium ETFs, ETFS Physical Platinum(PPLT) and ETFS Physical Palladium(PALL).

Mining stocks, a more leveraged way to invest in gold, were mixed. Barrick Gold(ABX) and Newmont Mining(NEM) were trading at $36.59 and $45.43, respectively. Other large cap miner Kinross Gold(KGC) was rising 2.18% to $17.30. Yamana Gold(AUY) was down 0.33% to $10.62.