Gold Prices Settle Near Record High
NEW YORK (
) --
shrugged off earlier losses and rallied Tuesday as investors bought gold as a safe- haven asset ahead of Friday's jobs number.
Gold for December delivery settled up $11.10 to $1,250.30 an ounce at the Comex division of the New York Mercantile Exchange. The gold price Tuesday has traded as high as $1,251 and as low as $1,233.50. The
U.S. dollar index
was lower by 0.14% at $83.02 while the euro was up 0.25% at $1.27 vs. the dollar. The spot gold price Tuesday was rallying $12, according to Kitco's gold index.
Gold prices had been selling off in early-morning trading Tuesday, but investors changed their tune to buy gold at "discount" prices as a safe-haven asset. Volume also picked up as momentum built, at 91,000 for the December futures contract on the Comex.
Despite prices settling near its record high at $1,250 an ounce, there still could be a correction. High gold prices could curb physical demand from India in September, traditionally a strong gold jewelry buying period, which could squash gold's rally.
Gold could also be subject to short-term profit taking. Prices have rallied 4% in August while the
Dow Jones Industrial Average
lost 4.3%, which makes the precious metal a prime target for investors looking to book profits.
In general, investors appeared hesitant to take new long positions before the long Labor Day weekend in the U.S. as the general mood in world markets turned fairly pessimistic.
Japan's Nikkei index fell almost 326 points
as global economic fears persisted and the yen continued its ascent. Investors were just as skeptical looking toward this week's flurry of U.S. economic data.
TheStreet Recommends
"I think we're in a case of bad news is good news for gold for the moment," Jeffrey Friedman, senior market strategist at Lind-Waldock. "I'm a buyer of dips ... the trend is still up ... the range is probably $1,225 to $1,242
an ounce."
For the long term, many analysts are still bullish on gold despite its 10-year rally.
.
But gold prices will have to get through Friday's U.S. jobs number to break out either to the upside or downside. The unemployment report is overshadowing all markets right now, including gold. A disappointing number might force investors to sell gold for cash but might also trigger another wave of safe-haven buying.
Video: Gold Prices Swing Both Ways >>
Traders are also looking to Wednesday's Institute for Supply Management report for August, which measures the purchasing strength of businesses. Any number over 50 indicates growth and expectations are for a small decline from 55.5 to 52.9, according to
Briefing.com
.
finished up 35 cents to $19.43 while copper settled down 5 cents to $3.37. Both industrial metals will be looking for direction from the ISM report as they are both correlated to infrastructure and the health of the global economy.
, a risky but profitable way to
, were following gold higher.
Kinross Gold
(KGC) - Get Kinross Gold Corporation Report
was up 3.94% to $16.89 while
Iamgold
(IAG) - Get Iamgold Corporation Report
was adding 3.86% to $19.11. Other gold stocks
Harmony Gold
(HMY) - Get Harmony Gold Mining Company Limited Report
and
Great Basin Gold
(GBG)
were trading at $10.26 and $2.16, respectively.
--
Written by Alix Steel in New York.
Readers Also Like:
>>3 Tech Takeover Targets to Watch
Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.
