NEW YORK (
settled more than $20 higher Monday as investors bought gold as a safe-haven asset.
Gold for August delivery closed $23.10 higher to $1,240.80 an ounce at the Comex division of the New York Mercantile Exchange. The gold price Monday has traded as high as $1,241.70 and as low as $1,212.10. The
was adding 0.17% to $88.39 while the euro fell 0.31% to $1.19 vs. the dollar, which was slightly higher than its recent $1.18 4-year low. The spot gold price Monday added more than $20, according to Kitco's gold index.
Gold prices were on the rebound Monday as investors decided to buy gold as a safety net. In early morning trading, gold prices slipped as traders needed cash to cover Friday's massive stock losses. The
Dow Jones Industrial Average
fell over 3% on Friday on the heels of a
Overseas equities followed suit Monday
and slid as well on the weak U.S. data and on worries that Europe's debt crisis would spread to eastern countries like Hungary.
Gold prices shook off earlier losses and surged now looking to retest their old high of $1,249 an ounce. Typically gold prices benefit from financial crisis fears as investors need a safe place to put their money and often choose gold. On Friday,
at $1,217.70, which prompted investors to take profits on one of the only assets yielding a good return. Lower gold prices then provided a good buying opportunity for those investors look to buy at a "discount," which makes $1,200/$1,190 a solid support area.
When Gold Will Break $1,250
Most analysts expect the risk trade to confine gold prices to a tight trading range as gold continues to reach for its record high of $1,249 an ounce. If risk appetite improves, investors could sell gold to raise money and buy stocks. If risk disappears, investors will opt for the safety of gold. Gold is also subject to peer-pressure buying which means that when there is a massive push into or out of gold by hedge funds or big-named investors, retail investors tend to follow suit.
"The market is in a pretty tight consolidation phase right now," says David Morgan, founder of
. "To get to the upside we have to break the $1,240 area and ... a good strong
support would be the $1,180 area."
were adding 86 cents to $18.16 while copper prices were losing 5 cents to $2.76. Copper heavyweight
Freeport McMoRan Copper & Gold
has said that China's attempts to slow its economy will pressure copper demand and weigh on prices over the long term. Shares of Freeport were falling more than 4% to $60.34.
Gold mining stocks, a more risky but more profitable way to
were mostly higher.
was rising 4.39% to $43.24 while
was higher by 3.49% at $55.59. Other gold stocks
were trading at $43.26 and $44.29, respectively.
was rising 3.03% to $17.36.
The popular gold exchange-traded fund,
SPDR Gold Shares
, was adding 1.83% to $121.37. The ETF shed more than 3 tons on Friday as investors closed out some gold positions headed into the weekend.
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.