NEW YORK (
climbed modestly higher Monday as investors bought the metal as a safe-haven asset.
Gold for February delivery added $6.90 to $1,386.10 an ounce at the Comex division of the New York Mercantile Exchange. The gold price traded as high as $1,388.90 and as low as $1,376.60 during Monday's session.
U.S. dollar index
was up 0.31% to $80.62 while the euro slid 0.49% to $1.31 vs. the dollar. The spot gold price was rising more than $9, according to Kitco's gold index.
Gold prices got a lift as investors bought the metal as protection against fresh tensions between North and South Korea, although strength in the U.S. dollar checked the gains.
South Korea went ahead with military exercises off the coast of Yeonpyeong, despite the fact that North Korea, which killed four people during a missile attack in November, threatened retaliation. South Korea asked civilians to seek shelter as a precaution.
Gold was also benefiting from uncertainty in Europe. Although European Union leaders agreed to a permanent crisis-lending facility starting in 2013, there was no immediate aggressive action announced out of the EU summit last week.
Worries are escalating about Spain's stability. The government might be in OK shape but the soaring debt of its banks and citizens could overwhelm the government and the debt market. Friday's aggressive downgrade of Ireland by Moody's didn't help matters as the ratings agency warned that Spain's credit rating was also on review.
Moody's spread even more Christmas cheer on Monday by downgrading five Irish banks --
Allied Irish Banks
Bank of Ireland
EBS Building Society
Irish Life & Permanent
Irish Nationwide Building Society
-- because of their reliance on government funding.
"Further pockets of profit-taking ... are likely in the run-up to year-end but as has been seen this morning the mix of economic and geo-political woes will continue to underpin the complex," says James Moore, research analyst at
>> CEO: Gold's Bubble Will Burst... at $5,000
The popular gold exhange-traded fund,
SPDR Gold Shares
, added more than 15 tons of gold on Friday. Tonnage in the less expensive
iShares Gold Trust
remained unchanged at 116.63 tons.
David Morgan, founder of
, thinks that $1,400 gold prices might be done for the year. "This time of year most traders square their books ... I'm flat personally ... I'm happy just to rest out the rest of this year." January could see a flurry of activity as traders buy back some of their gold positions.
rose 22 cents to $29.35 while copper added 4 cents to $4.20. In contrast to gold, the silver ETF,
iShares Silver Trust
shed 60 tons on Friday.
Gold mining stocks
, a risky but potentially profitable way to
, were higher Monday.
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(GG - Get Report)
was up 0.95% to $44.87 while
Freeport McMoRan Copper & Gold
(FCX - Get Report)
was 0.96% higher at $114.80. Other gold stocks
(NGD - Get Report)
were trading at $9.28 and $17.79, respectively.
was adding 3.16% to $14.67 after the company announced it would make an offer for
Copper Canyon Resources
. NovaGold is seeking full ownership of the Copper Canyon copper, gold and silver deposit, which is adjacent to the company's Galore Creek project in British Columbia. NovaGold owns 50% of Galore Creek, which is one of its biggest properties, while
holds the other half. NovaGold has offered a 41.8% premium for the 57.4 million outstanding shares of Copper Canyon Resources, which trades on the Toronto Stock Exchange.
Written by Alix Steel in New York.
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