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[video] Gold Prices Soar in Oversold Market

NEW YORK (TheStreet) -- Gold prices were jumping Tuesday as traders viewed the market as oversold and as a good opportunity to buy the yellow metal at lower levels.

Gold for February delivery at the COMEX division of the New York Mercantile Exchange was popping $30.60 to $1,264.80 an ounce. The gold price traded as high as $1,267.50 and as low as $1,237.40 an ounce, while the spot price was adding $25.93.

"The market continues to bounce higher from the oversold positions of last week -- a week to the day we suggested that the market was well ahead of itself and taking a position," Peter Hug, global trading director at Kitco Metals, wrote Tuesday in a note to investors.

Tuesday's price move is similar to the surge gold posted Dec. 4 as a short-covering rally boosted the price by about $26 that day. Gold plummeted the following day as market participants shorted the market.

"The market is aggressively short, but the gold market has not confirmed a breakout," Hug wrote in Tuesday's note.

Silver prices for March delivery were climbing 63 cents to $20.34 an ounce, while the U.S. dollar index was dropping 0.32% to $79.90.

Gold mining stocks were mostly higher on Tuesday, in line with gold futures. AngloGold Ashanti (AU - Get Report) was one of the top gainers in the space, soaring 7.3% to $13.03 a share. Barrick Gold (ABX - Get Report) was gaining 5.9% to $16.94

Gold ETF SPDR Gold Trust (GLD) was up 2% to $122.06, while iShares Gold Trust (IAU) was increasing 2.1% to $12.28.

-- Written by Joe Deaux in New York.

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