Gold Prices Slip From New High

Gold prices Thursday were slipping after touching a new 2010 high as investors took profits and awaited for Greece's financial aid package.
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NEW YORK (

TheStreet

) --

Gold prices

Thursday were slipping after touching a new 2010 high as investors took profits and awaited for Greece's financial aid package.

Gold Prices Diverge

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Gold for June delivery was down $3.40 to $1,168.40 an ounce at the Comex division of the New York Mercantile Exchange. The gold price Thursday has traded as high as $1,171.80 and as low as $1,162.20. The

U.S. dollar index

was falling 0.45% to $82.01 while the euro firmed 0.14% against the dollar. The spot gold price Thursday was adding $3, according to Kitco's gold index.

Gold prices Wednesday hit a new 2010 high

of $1,174.50 an ounce after Standard & Poor's struck Europe again. The rating agency downgraded Spain's debt to AA with a negative outlook, which triggered a flight to safety into gold. As paper currencies deteriorate in value, investors buy gold as a form of money that retains its value.

Momentum buying petered out Thursday as investors digested more sovereign debt news. Fitch said it reaffirmed its AAA rating for Spain which was supporting a stronger euro. The rating agencies have been under the spotlight for being too lax with their AAA ratings of complicated mortgage-backed securities during the subprime crisis.

Reports indicate that the European Union is working on a bigger multi-year

financial aid package for Greece

, so even though its debt is enormous, the news calmed investors. The International Monetary union and EU are still in talks about the bailout, but

Reuters

said Germany would be ready to give Greece money before May 9. The European Central Bank is calling for a swifter resolution to the Greek debt crisis to prevent a default. The yield on

Greece's 10-year bond

fell slightly to 9.73% from over 10% as investors felt more secure about lending money to the country.

Paper gold, or futures contracts, and the spot price diverged slightly Thursday as traders closed out some contracts as the month draws to a close. Meanwhile, investors who are still skittish over European sovereign debt continue to buy physical gold as a safety net.

"It's an indecision day here," says Jon Nadler, senior analyst at Kitco.com. "Gold could still finish on the positive side on the day. There's still some push among the longs to try to make this $1,175 resistance area ... fall ...

But there are definite road blocks there before we can talk about $1,200, $1,210."

Nadler says that scrap flows increased during the week as gold broke $1,160 which indicated that some investors are unwilling to pay higher prices for "new" gold. There is also speculation that European central banks with a huge debt burden might consider selling some of its gold reserves for cash, which would weigh on prices.

The

price of silver

was flat at $18.10 while copper prices were losing 2 cents to $3.34.

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Mining stocks, a more risky but more profitable way to

invest in gold

, were mixed.

Barrick Gold

(ABX)

was rising 1.26% to $42.69 after the stock received an upgrade at Jefferies to buy from hold.

Newmont Mining

(NEM) - Get Report

was adding 1.68% to $55.66 while other large-cap miners

Kinross Gold

(KGC) - Get Report

and

Goldcorp

(GG)

were trading at $18.77 and $42.71, respectively. Goldcorp said it earned 22 cents a share in the first quarter and produced 625,000 ounces of gold which was up from 616,500 ounces a year ago.

Shares of

Freeport McMoRan Copper & Gold

(FCX) - Get Report

were trading up 1.24% to $77.44 while

Hecla Mining

(HL) - Get Report

was falling 1.90% to $5.95. The stock was downgraded at UBS from buy to neutral.

The gold ETF,

SPDR Gold Shares

(GLD) - Get Report

, added over 6 tons on Thursday as panicked investors fled to gold. Shares were slipping slightly to $114.28.

>>How to Invest in Gold

>>More stories on gold investing

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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.