Gold Prices Lower as Dollar Rises - TheStreet



) --

Gold prices

were sinking almost $30 Wednesday as the U.S. dollar rallied.

Gold for February delivery was slipping $28.90 to $1,111.10 an ounce at the Comex division of the New York Mercantile Exchange. Prices have traded as high as $1,141.70 and as low as $1,106.80. Gold resumed its inverse correlation to the U.S. dollar after

Tuesday's simultaneous rally

. The

U.S dollar index

was rising 1.08% to $78.35 as European debt fears pressured the euro. Also contributing to a dollar rally was increased speculation that


could start restricting credit.

"We're seeing some reversion to safer assets and the perceived safety of the yen and the dollar...and that's giving gold a bit of a hard time," says Nicholas Brooks, head of research and investment strategy for ETF Securities.

Gold is Overreacting

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Mixed U.S. earnings and global economic recovery uncertainty is prompting investors to sell riskier commodities and buy up safer assets like currencies. Many analysts expect this trend to continue in the short term and gold prices to remain sensitive to market jitters.

"Markets are still very unsettled," argues Brooks. "A lot of investors are still trying to get a handle on what 2010 is going to be like ...

resulting in a lot of volatility

and a lot of choppy trading."

Silver prices

were falling 90 cents to $17.90 while copper was down 9 cents to $3.35. Even platinum ended its multi-month bull run, slipping $22.40 to $1,617.

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Mining stocks, a more leveraged way to

invest in gold

, were also free falling.

Barrick Gold


was slipping 4.66% to $37.81 while another large-cap miner,

Newmont Mining

(NEM) - Get Report

, was plummeting 6% to $45.52.

Kinross Gold

(KGC) - Get Report

was down with its peers to $18.43.

Shares of

Freeport McMoran Copper & Gold

(FCX) - Get Report

were down 3.57% to $81.57 and

Yamana Gold

(AUY) - Get Report

was sinking over 5.31% to $11.05.

AngloGold Ashanti

(AU) - Get Report

was losing 4.38% to $38.99.

The popular physically backed ETF,

SPDR Gold Shares

(GLD) - Get Report

was falling only 2.36% to $108.89. The ETF shed almost another ton on Monday as investor traded out of the gold.

>>Slideshow: How to Invest in Gold

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Written by Alix Steel in New York


Alix joined 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.