Gold Breaks $1,100

Gold prices hold the critical $1,100 an ounce level as the U.S. dollar sinks.
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NEW YORK (

TheStreet

) --

Gold prices

were rising Tuesday as the U.S. dollar continued to struggle.

Gold for April delivery was rallying $12.50 to $1,117.50 an ounce at the Comex division of the New York Mercantile Exchange. Prices have traded as high as $1,119.90 and as low as $1,099.50. The

U.S. dollar index

was slipping 0.23% to $79.01.

Adding to dollar weakness was the news that the

Reserve Bank of Australia

held interest rates steady at 3.75% after most analysts predicted the central bank would raise rates. Lower global interest rates increase the likelihood of inflation which is bullish for gold prices as investors buy the precious metal as an alternative asset.

China Will Drive Gold Prices

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"I think gold in the next week or so will trade between $1,100 and $1,145

an ounce," says Jeffrey Nichols, Managing Director of American Precious Metals Advisors. "Near $1,100 we've seen in the last week more buying coming from the Asian markets ... ahead of the Chinese New Year ...

which triggers buying not just of investment products but also jewelry."

Silver prices

were rising 8 cents to $16.74 while copper was up 1 cent to $3.09. Platinum and palladium were conservatively stronger at $1,579 and $443, respectively. Many analysts speculate if investment enthusiasm has tired out after the initial excitement over the first two U.S. physically backed platinum and palladium ETFs,

ETFS Physical Platinum

(PPLT) - Get Report

and

ETFS Physical Palladium

(PALL) - Get Report

.

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Mining stocks, a more leveraged way to

invest in gold

, were mixed.

Barrick Gold

(ABX)

and

Newmont Mining

(NEM) - Get Report

were trading at $36.59 and $45.43, respectively. Other large cap miner

Kinross Gold

(KGC) - Get Report

was rising 2.18% to $17.30.

Yamana Gold

(AUY) - Get Report

was down 0.33% to $10.62.

Shares of

Freeport McMoRan Copper & Gold

(FCX) - Get Report

were higher by 0.98% to $72.29 after the stock was upgraded to buy at

Citigroup

.

Jim Cramer

on Mad Money Monday recommended

Southern Copper

(PCU)

over Freeport. The stock was rising 2.84% to $29.28.

Shares of the popular physically backed ETF,

SPDR Gold Shares

(GLD) - Get Report

were up 1.06% to $109.39.

>>Slideshow: How to Invest in Gold

>>More stories on gold investing

--

Written by Alix Steel in New York

.

Alix joined TheStreet.com TV in February 2007. Previously, she held positions in film and theater production, management, and legal administration. Alix has a degree in communications and theater from Northwestern University.