Gold Prices Rise on Bargain Hunting

(Gold prices story updated with latest prices and economic information)
NEW YORK (TheStreet) -- Gold prices are higher midday Friday with bargain hunters jumping on its decline to six-week lows as the dollar softened.

The gains are being offset, however, by stronger risk appetite that's challenging the yellow metal's appeal as a safe haven defense against financial uncertainties in Europe and worries about a global economic slowdown. The 10-year Treasury yield has been rising 3.05% in midday.

Gold for August delivery popped by $16.60 to $1212.70 an ounce at the Comex division of the New York Mercantile Exchange. The gold price Friday has traded as high as $1214.10, and as a low as $1194.60. The U.S. dollar index is slightly higher at $83.91, up 0.1%, while the euro index has been rallying 0.5% to 1,088.17 vs. the dollar. The spot gold price Friday was rising more than $13, according to Kitco's gold index.

Gold futures prices had a decent start in the morning as demand from the largest gold jewelry market, India, begins climbing again due to investment interest and ahead of religious festivals where the metal is used for decorative purposes.

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Meanwhile, would-be buyers of gold have been waiting for a dip in the metal -- "dips in gold continue to find pockets of investment bargain hunting ," James Moore, an analyst at TheBullionDesk.com, wrote in a his daily note this morning. Kitco analyst Jon Nadler believes there's still room for more downside in this safe-haven investment as the financial crisis in Europe begins to resolve itself.

"We have been in crisis mode since late 2006 and nothing goes on forever," he said.

Silver prices are trading up 29 cents at $18.17 while copper prices are trading at $3.06, up 4 cents.