Gold Prices on the Rise

NEW YORK (TheStreet) -- Gold prices Tuesday were rallying as a tentative U.S. dollar and better investment sentiment lifted the gold price.

Top Trend Moving Gold Prices

Gold for June delivery was up $3.90 to $1,139.70 an ounce at the Comex division of the New York Mercantile Exchange. The gold price Tuesday has traded as high as $1,146.80 and as low as $1,134. The U.S. dollar index was rising 0.22% to $81.10 and the euro was down 0.41% against the dollar. The spot gold price today was rising $5, according to Kitco's gold index.

The risk trade was slowing returning Tuesday as markets breathed a sigh of relief that the Securities and Exchange Commission's vote to bring fraud charges against Goldman Sachs was split three to two. Calmed traders sold out of the U.S. dollar and bought riskier equities and commodities, which helped gold find support around $1,135 an ounce. A slew of better than expected earnings from Citigroup(C) and Goldman Sachs(GS) as well as a potential resolution over Greece's debt crisis also helped offset jitters over Goldman's future.

According to reports, Greece is ready to agree to a bailout package from the IMF and European Union, but is waiting on an interest rate decision. Joint EU and IMF discussions will start Wednesday and an aid agreement is expected quickly. As long as interest rates are reasonable for Greece, the country will most likely accept the bailout money so it can pay off its debt and coupon payments due in May. There is strong demand for Greek bonds but at a steep price as the yield on the 10-year notes rose to 7.86%. The gold price is still heavily tied to the dollar/euro trade and any resolution to the Greek debt drama will ease the downward pressure on the euro and help gold prices.

Many analysts expected gold prices to break its all time high of $1,227 an ounce, but were unconcerned by the recent selloff. "When you're talking about something that sells for $1,100, a $10 change in price is really trivial," says J.C. Doody, editor of goldstockanalyst.com. "The real driver for the gold price is the real interest rate ... the real interest rate is barely negative ... There's just not a lot of fear at the moment on the part of investors about inflation ... Until we see some kind of change on the macro front we're not going to see too much action in gold."