Gold Prices Reach for $1,254 - TheStreet

Gold Prices Reach for $1,254

Gold prices moved double digits Thursday and almost broke their record high as investors loaded up on gold as a safe haven asset.
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NEW YORK (

TheStreet

) --

Gold prices

were gunning to break their record high Thursday as an uncertain stock market fueled demand for gold as a safe haven asset.

Gold for August delivery settled $18.20 higher at $1,248.70 an ounce at the Comex division of the New York Mercantile Exchange. The gold price today has traded as high as $1,252.80 and as low as $1,231. The

U.S. dollar index

was falling 0.55% to $85.60 while the euro was rising 0.73% to $1.239 against the dollar. The gold spot price Thursday was popping $15, according to Kitco's gold index.

Investors were selling stocks on a flurry of disappointing economic data including higher-than-expected weekly initial jobless claims and were hedging their bets with gold. Lackluster risk appetite was buoying higher prices, and momentum buying tried to push gold past its record of $1,254 an ounce.

Gold Prices Prep For Explosive Pop

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Gold is an attractive place for investors to put their money in uncertain times, as it's money that retains its value. The U.S. dollar has also been considered a safe haven, but as headline risks from the BP oil spill, Greece labor strikes and Spain's debt issues continue to scare traders, hard assets become more attractive than paper currencies.

For the moment, the

euro is recovering after a successful $4.3 billion bond sale

in Spain, which was weighing on the dollar and supporting gold prices.

However, yields on

10-year bonds were up 20% from the previous bond sale

as investors remain reticent to lend the country money forcing Treasury to sweeten the pot. There are also still worries that the European Union and IMF are putting together a secret

bailout for Spain

although officials have denied these rumors.

Gold prices have continued to rise despite the lack of inflation data in the U.S.

which indicates that its general fear and headline risk not inflation that's triggering gold's move. Wednesday's core producer price index rose 0.2% and Thursday's core consumer price rose 0.1%, both in line with expectations.

Video: Best Way to Buy Gold >>

Many analysts expect gold prices to continue their recent pattern of consolidation and recovery as a double digit price move to the upside could trigger profit taking.

"As ever in the short term, anything could happen, but given the continuing degree of sovereign risk, gold is more likely to move higher than lower," says Mark O'Byrne, executive director of GoldCore. "$1,300/oz remains possible over the summer despite the traditionally negative summer season."

Silver prices

settled up 33 cents to $18.77 in tandem with gold while copper closed down 9 cents to $2.90.

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Mining stocks, a more risky but more profitable way to

invest in gold

, were rising higher.

AngloGold Ashanti

(AU) - Get Report

was rising more than 2% to $44.89 while

Yamana Gold

(AUY) - Get Report

were adding 2.38% to $10.81. Other gold miners

Gold Fields

(GFI) - Get Report

and

Randgold

(GOLD) - Get Report

closed at $14.22 and $93.65, respectively.

--

Written by Alix Steel in New York

.

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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.