Gold Prices Slip on EU's Massive Aid Plan

Gold prices were falling as profit-taking and a soaring Dow weighed on prices.
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(Gold brief prices updated)

NEW YORK (

TheStreet

) --

Gold prices

Monday had fallen below $1,200 after the

European Union's massive aid plan

to Greece and other eurozone countries prompted investors to sell gold and buy stocks.

Gold for June delivery was slipping $9 to $1,201.40 an ounce at the Comex division of the New York Mercantile Exchange Monday afternoon. The gold price Monday has traded as high as $1,207 and as low as $1,184.40. The

U.S. dollar index

was falling over 1% to $83.53 as the

euro rallied off of its 14-month low

and traded at $1.29 vs. the dollar. The spot gold price Monday was down over $13, according to Kitco's gold index.

Investors were taking some profits in gold after

prices popped 2.5% last week

and as the EU took aggressive measures to fight ballooning sovereign debt in eurozone countries. The

three-year plan

and

$1 trillion price tag

combines efforts from the European Commission, eurozone countries and the International Monetary Fund to support the euro and poorer EU countries at risk for default like Greece, Spain and Portugal. The European Commission will contribute $75 billion, the 16 eurozone countries will ante up $750 billion and the International Monetary Fund will contribute at least $37 billion.

The European Central Bank will also lend eurozone countries money by buying bonds and the

Federal Reserve

is reopening its swap lines so central banks can pump dollars into local banks. This aggressive bailout, which was more than the Troubled Assets Relief Program, sent the

Dow Jones Industrial Average soaring over 400 points

as investors bought risky equities and sold out of safer assets like gold. A lot of investors had short positions heading into the weekend as no one wanted to invest heavily in stocks, but preferred to bet against the market with Greece riots continuing to make headlines. On Monday, investors had to raise cash to buy back their shorted stock by selling some of their precious metal positions.

Many analysts expect gold prices to stay in a narrow trading range and re-test the $1,180 level but anticipate strong buying as investors buy gold at discount levels.

"I think some profit-takers come in but

the gold price should hold up," says Scott Redler, chief strategic officer of

T3Live.com

. Redler thinks ultimately gold will hit $1,300 - $1,400 and looks at selloffs as buying opportunities. "If the $1,180, $1,190 hold during this 'down day' you better believe the next move on gold will be through those old highs and we will be seeing a lot higher prices in the coming months."

More on Gold

Greek Gold: Collateral on Bailout Money?

Silver prices

were up 11 cents to $18.57 while copper prices were popping 8 cents to $3.23. Silver took some spotlight from gold after a report from the

New York Post

that Federal officials are launching a criminal and civil probe into

JPMorgan

(JPM) - Get Report

to determine if the investment bank tired to

depress silver prices

. David Morgan, founder of

Silver-Investor.com

, said it's unclear how significant this probe will be to silver prices, but he thinks silver can outperform gold by 30% over the long term.

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Gold mining stocks, a more risky but more profitable way to

invest in gold

, were mixed.

Barrick Gold

(ABX)

was rising 2.2% to $43.74 while

Newmont Mining

(NEM) - Get Report

was adding 3.3% to $55.16. Other large-cap miners

Kinross Gold

(KGC) - Get Report

and

Goldcorp

(GG)

were trading higher at $17.42 and $43.39, respectively.

Shares of

New Gold

(NGD) - Get Report

were rising 2.1% to $5.79 despite the stock receiving a downgrade from buy to hold at

TD Newcrest

.

AngloGold

(AU) - Get Report

was rising to $41.48 while

Yamana Gold

(AUY) - Get Report

was up slightly to $10.69.

Shares of the gold ETF,

SPDR Gold Shares

(GLD) - Get Report

were down 0.6% to $117.59. The ETF added almost three more tons on Friday as investors fled into gold.

--

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.