This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Gold Finds Buyers but Ride Still Bumpy

NEW YORK ( TheStreet) -- A resurgence in investment demand propped up gold prices Monday, but the ongoing battle between profit-takers and bargain-hunters promises to keep gold in a tight range.

Gold for February delivery added $3.50 to $1,344.50 an ounce at the Comex division of the New York Mercantile Exchange. The gold price traded as high as $1,352.40 and as low as $1,340.70 during Monday's session, while the spot gold price gave up its gains and dipped $2.70, according to Kitco's gold index.

The U.S. dollar index was down 0.18% to $78.07 while the euro was flat at $1.36 vs. the dollar.

Gold exchange-traded fund investors were hot for shares Friday. SPDR Gold Shares (GLD) added almost 20 tons in one day as investors jumped on gold's 5.6% 2011 selloff to buy the metal. iShares Gold Trust (IAU), the less expensive ETF, has not lost or added since Dec. 23.

Silver didn't fare quite as well as the silver ETF -- iShares Silver Trust (SLV) -- dropped 180 tons on Friday. Important to keep in mind is that Saturday was options expiration and the same kind of tonnage increase in the GLD happened in last month. Prior to options expiring on Dec. 18, also a Saturday, the GLD added 15.18 tons on Dec. 17 as traders sought gold to hedge their future contracts.

Whether the increase Friday signals technical trading or a new buyer, this kind of schizophrenia in the precious metal trade won't die out anytime soon as traders battle with a risk on/risk off mentality.

"The build in SPDR holdings Friday again indicates the scale of pent-up demand below the market due to ongoing concerns over debt-default in the eurozone and rising inflation fears," argues James Moore, research analyst at

The uptrend for gold and silver will largely depend on investor dip-buying. Investors are unlikely to commit a huge amount of new money to gold and silver if they think there could be another selloff or if they feel better about a global recovery. But big double-digit declines will entice some traders to buy up the metal.

David Morgan, founder of, is still not buying any gold or silver. "I might try to scale in on the way down if we get low enough. Right now the next support level, and it's a good one, is about $1,330 for gold so I am going to watch this one very closely," Morgan says.

Even if gold does bounce, which it is doing Monday, prices could still retrace and come back towards the $1,330 level, Morgan says.
1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
GLD $123.41 1.10%
IAU $12.46 0.97%
SLV $16.68 1.00%
FCX $11.64 3.10%
GFI $4.62 6.70%


Chart of I:DJI
DOW 17,640.85 -19.86 -0.11%
S&P 500 2,047.12 -3.51 -0.17%
NASDAQ 4,699.2780 -17.8160 -0.38%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs