NEW YORK ( TheStreet) -- The sinking of a South Korean naval ship off North Korea helped fuel a rally Friday in gold prices .

Gold for April delivery was adding $7.90 to $1,100.80 an ounce at the Comex division of the New York Mercantile Exchange. Prices have traded as high as $1,106.80 and as low as $1,088.50. The U.S. dollar index was slipping 0.50% to $81.75. Gold's spot price was popping nore than $14, according to Kitco's gold index.

In times of fiscal and international crises, gold traditionally becomes a safer, alternative investment. Spot gold was getting the biggest boost as investors rotated into the physical metal rather than futures contracts. The Silver prices were rising 8 cents to $16.83 while copper up 2 cents to $3.40.

Investors leerned Friday of a long-awaited resolution to Greek sovereign debt. The bailout will consist of a combination of IMF and European Union aid. The IMF will come through with a "substantial" contribution, but the EU requires unanimous agreement from the 16 eurozone countries and can only be used as a last resort, if Greece loses access to all credit markets.

The fact that the eurozone could manage its own debt problems but not be entirely responsible for the 45 billion-euro debt price tag supported the euro, weighed on the U.S. dollar and boosted gold. Reportedly, the EU will provide two-thirds of the bailout while the IMF will deliver the remaining funds with specific numbers still being discussed.

Celebration may be short lived. Portugal's debt crisis still looms, and many analysts expect the euro to continue to come under long-term pressure. Gold prices are staying in a tight trading range for now, with bargain-hunting ramping up around $1,090 an ounce. The popular physically backed ETF SPDR Gold Shares ( GLD) added 4.57 tons Thursday as investors rotated into the alternative asset.

" The issues with ... Portugal this week have been a stark reminder of the huge debt problems facing many of the world economies," says James Moore, analyst at in his daily metals report. " This will continue to overshadow market risk appetite for many months and potentially years to come. We believe this will continue to prompt diversification away from fiat currencies and towards more tangible assets ... further chart support in gold is expected around $1,088/$1,074."

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Mining stocks, a more leveraged way to invest in gold, were mixed. Barrick Gold ( ABX) was slightly higher at $36.89, while Newmont Mining ( NEM) was trading up 1.22% to $48.94. Other large-cap miners Kinross Gold ( KGC) and Goldcorp ( GG) were trading at $16.79 and $36.46, respectively.

Shares of AngloGold Ashanti ( AU) were up over 2% at $36.81. The company entered into a joint venture agreement with l'Office des Mines d'Or de Kilo-Moto to develop a project in the Democratic Republic of Congo. Freeport McMoRan Copper & Gold ( FCX) was trading at $78.58. The company declared a quarterly dividend Thursday of 15 cents a share.

-- 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.

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