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Gold prices

Tuesday staged a big rally as investors fled to the safety of the hard asset after the S&P downgraded Greece and Portugal.

Gold for June delivery was surging $6.80 to $1,160.80 an ounce at the Comex division of the New York Mercantile Exchange. The gold price Tuesday has traded as high as $1,165.30 and as low as $1,146.60. The U.S. dollar index was adding 0.61% to $81.71 while the euro was sinking 0.55% against the dollar. The spot gold price today was popping over $8, according to Kitco's gold index.

The gold price Tuesday was reversing earlier losses and was retaking the $1,160-an-ounce area. Standard & Poor's slashed Greece's sovereign credit rating to junk and lowered Portugal's long term credit rating from A+ to A negative. Investors were turning to the safety of the hard asset and were giving gold prices a boost.

Gold had been under pressure as today's

options expiration

triggered minor technical selling. Investors are still cautious ahead of

Lloyd Blankfein's testimony to Congress

over Goldman Sachs' behavior during the subprime mortgage crisis and the start of the

Federal Reserve's




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The Fed is expected to keep key interest rates at zero or 0.25%, but any wording that the Fed is worried about inflation could pressure gold prices even further. Any end to the flow of free money will support a stronger dollar and make gold more expensive to buy in other currencies.

For now, fear and bargain hunting are buoying prices and pushing gold up to $1,175 an ounce. The gold ETF,

SPDR Gold Shares

(GLD) - Get SPDR Gold Trust Report

, added more than 6 tons on Monday to a record 1,146.22 tons. The physically backed ETF is a popular way to invest in gold as a trader can own gold without the hassle. Shares were up 0.74% to $113.59.

"For the moment we expect gold to maintain its current sideways to higher trend," says James Moore, analyst at in his daily metal report. "

Gold will be underpinned by scaled down physical and investment buying but still requiring a close above $1,161 to confirm a break-out."


price of silver

was down 5 cents to $18.28 while copper prices were losing 7 cents to $3.45.

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Platinum and palladium were also suffering minor losses despite the fact the

Ford reported a blowout quarter



(F) - Get Ford Motor Company Report

expects to sell 11.2 million cars in just North America for 2010 and is taking market share in Asia, Europe and South America. Platinum and palladium are key metals used in car manufacturing. CEO Alan Mulally said, "The recovery is fragile and the global auto industry continues to deal with excess capacity." Any ramp up in production could constrict the supply of platinum and palladium, which would support higher prices.

Mining stocks, a more leveraged way to

invest in gold

, were mixed.

Barrick Gold


was trading at $40.28 while

Newmont Mining

(NEM) - Get Newmont Goldcorp Corporation (NEM) Report

was down 1.62% to $52.26. Newmont said it earned $1.11 a share in the first-quarter, or 83 cents accounting for a tax benefit and asset sale. The company expects to produce 6.3 to 6.8 million ounces of gold in 2010.

Other large-cap miners

Kinross Gold

(KGC) - Get Kinross Gold Corporation Report




were trading at $18.42 and $40.70, respectively. Shares of

Golden Star

(GSS) - Get Golden Star Resources Ltd. Report

were trading slightly lower at $4.26 after the stock was downgraded by Raymond James from outperform to market perform.

Shares of

Freeport McMoRan Copper and Gold

(FCX) - Get Freeport-McMoRan, Inc. (FCX) Report

were sinking 4.54% to $77.70.

>>How to Invest in Gold

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Written by Alix Steel in New York


Alix joined 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.