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Gold Prices Stall

Gold prices were flat-lining as the U.S. dollar rallied.
Author:

New York (

TheStreet

) --

Gold prices

were flat-lining Wednesday on the back of a

stronger U.S. dollar

.

Gold for April delivery was rising $2.80 to $1,122.60 an ounce at the Comex division of the New York Mercantile Exchange. Gold has traded as high as $1,128.70 and as low as $1,116.30. The

U.S. dollar index

was rising 0.38% to $79.95.

Gold is coming under pressure as investors take some profits, and the dollar stages a rally. Many analysts expect gold to continue to track the euro, which is still held hostage by European sovereign debt fears. The eurozone countries have given Greece until March 16 to start reducing its debt levels before substantial aid is provided.

Gold prices

had a monster run on Tuesday adding almost $30 closing at $1,119.80 an ounce just below the critical $1,125 resistance level. "Gold could still be dragged lower by a reversal in the euro," says James Moore, analyst at thebulliondesk.com in his daily metals report. "But should the metal break $1,125, we would look for a test towards the $1140-62 area."

The World Gold Council released its independent report from GFMS Limited early Wednesday stating that overall identifiable

gold demand

fell 11% in 2009. India consumption continued to struggle as gold hit record high prices in all currencies while China saw an increase of 30.3 tons in total consumer demand. Investment demand was the only subsector showing strength, rising 7%, although mostly due to demand in Europe and the U.S.

Gold investment demand was finding further support from major hedge funds. Paulson & Co. released its Form 13-F for the fourth quarter of 2009 (view

Paulson's portfolio

), and gold continued to be a big bet. The hedge fund founded by John Paulson listed its top holding as

SPDR Gold Shares

(GLD) - Get Report

with strong positions in

AngloGold Ashanti

(AU) - Get Report

,

Gold Fields

(GFI) - Get Report

and

Kinross Gold

TheStreet Recommends

(KGC) - Get Report

. In November, John Paulson announced that he would launch a gold hedge fund with $250 million of his own capital.

Silver prices

were rising 8 cents to $16.23 while copper was adding cents to $3.25.

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Mining stocks, a more leveraged way to

invest in gold

, were mixed.

Barrick Gold

(ABX)

was rising 1.42% to $37.97 while

Newmont Mining

(NEM) - Get Report

was up 0.17% to $47.50.

Kinross Gold

(KGC) - Get Report

was flat at $18.94 while

Goldcorp

(GG)

was higher by 0.76% to $38.63.

Shares of

Freeport McMoRan Copper & Gold

(FCX) - Get Report

were flat at $75.79. The popular physically backed ETF, SPDR Gold Trust, added 3.05 tons on Tuesday on strong investor demand. Shares were rising 0.05% to $109.68.

>>Slideshow: How to Invest in Gold

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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.