NEW YORK ( TheStreet) -- Gold prices fell below $1,100 despite a weaker U.S. dollar. Gold for February delivery was sinking another $12.50 to $1,090.70 an ounce at the Comex division of the New York Mercantile Exchange. Prices have traded as high as $1,098.0 and as low as $1,081.90. The U.S. dollar index was also falling 0.27% to $78.20 as the euro rallied. Gold typically trades in opposition to the U.S. dollar since dollar-based commodities become cheaper to buy in other currencies when the dollar falls. But gold is bucking that inverse correlation Friday as general risk aversion cripples the commodity. President Obama announced Thursday a proposal to limit consolidation in the bank industry as well as restrict reportedly risky trading activities. Gold settled down almost $10 to $1,103.20 an ounce on the news. Also weighing on gold prices is the worry that China will tighten credit ending the supply of free money which has helped stimulate the global economy. "The dollar and broad risk sentiment will continue to provide short-term direction
for gold ," says James Moore, analyst at thebulliondesk.com in his daily metals report. "A failure to hold the $1,074 low from December could see gold post a deeper correction back to $1,038-62 channel." Many analysts believe gold needs to settle above $1,110 an ounce in order to avoid a larger pullback. Silver prices were down 48 cents to $17.03 while copper was up 6 cents at $3.36. Platinum prices were also slipping dramatically down $37.10 to $1,555 and palladium was losing $20.30 to $433.65. The white metals are subject to more volatile swings due to a thinner investment market.