NEW YORK ( TheStreet ) -- Gold prices closed slightly higher Monday after Ireland agreed to a bailout package from the International Monetary Fund and European Union and traders prepped for options expiration.
Gold for December delivery added $5.50 to $1,357.80 an ounce at the Comex division of the New York Mercantile Exchange. The gold price traded as high as $1,364.80 and as low as $1,347.90 during Monday's session.
The U.S. dollar index was adding 0.31% to $78.75 while the euro was losing 0.52% to $1.36 vs. the dollar. The spot gold price Monday was up $8.70, according to Kitco's gold index.
Gold prices spent most of the trading session treading water as Ireland relented and asked for bailout money from the joint IMF and EU lending facility. Although the euro amount and terms are still being finalized, the speculation is €95 billion, which was pressuring the currency and supporting the U.S. dollar.The euro had been selling off as Ireland resisted a bailout and investors feared a default. Markets hate uncertainty, and a definitive plan should calm jittery investors and help the euro rise in value. The problem is a final decision could be weeks away and Portugal and Spain are still on the chopping block. If investors keep worrying about the health of eurozone economies and debt contagion, the euro could continue to come under pressure and buoy the dollar. A stronger dollar is bad for gold as the dollar-backed commodity becomes more expensive to buy in other currencies. A lack of crisis in Ireland might also temper any gains in gold. Gold likes crises. Investors view the metal as a safe-haven asset and buy it as protection against weak paper currencies and when disaster erupts. An Irish debt default was shaping up to put gold buyers in crisis mode but a bailout package has left gold without a strong catalyst. "We're not in crisis mode," says Jon Nadler, senior analyst Kitco.com. Although gold prices might trade higher on technical buying, without a big crisis, levels like $1,400 gold will be hard to sustain. "It looks like the $1,400 level might be a ceiling for gold for a while," says David Morgan, founder of Silver-Investor.com. "We have options expiration coming up Tuesday ... the last couple of months