NEW YORK ( TheStreet ) -- Gold prices popped Tuesday as investors fled into gold after Moody's downgraded Portugal's sovereign debt rating. Gold for August delivery settled $14.80 higher at $1,213.50 an ounce at the Comex division of the New York Mercantile Exchange. The gold price Tuesday has traded as high as $1,218.80 and as low as $1,196.50. The U.S. dollar index was losing 0.68% to $83.63 while the euro was rallying 0.96% to $1.27 vs. the dollar. The spot gold price Tuesday was adding more than $16, according to Kitco's gold index. Moody's slashed Portugal's debt rating by two notches to A1 with a stable outlook and stated that the country's growth prospects remain weak. Portugal follows Greece and Spain in a long line of struggling European Union nations that suffered downgrades. Although the news itself might not be a big surprise, the reminder that eurozone countries are still at risk despite recent budget deficit cuts reignited gold's appeal as a safe-haven asset. Bargain-hunters were also supporting gold prices as they gobbled up the precious metal at discount prices. Gold has fallen 1.1% in the past week as summer doldrums and a resurgence in risk appetite triggered a rush into stocks and out of gold. But investors took advantage of prices below $1,200 to buy the precious metal. "Gold may be vulnerable to further liquidation from stale longs," says James Moore, analyst at thebulliondesk.com, in his daily metals report. "However, we expect further physical and investment buying interest around $1190-$1185 to keep gold underpinned." Gold prices will look for direction from earnings season, which officially kicked off on Monday. Stronger-than-expected guidance from companies could cheer investors and improve their appetite for riskier stocks, which would weigh on gold prices as traders dumped their positions for equities. However, if earnings are just in line with estimates or fall short, then gold could see another safe-haven boost even in the middle of a seasonally-weak buying period.
"I think the situation in Europe will continue to drive more buyers ... into gold," argued Brian Hicks, co-manager of the U.S. Global Investors Global Resources Fund. "I think a lot of what's driving the price of gold is more related to currencies not so much earnings from equities. But if we do see a much stronger-than-expected earnings season with some positive forward guidance perhaps that could weigh on gold to some degree."