An explosive conflict between North and South Korea didn't materialize as North Korea backed off previous statements that it would retaliate after South Korea's military exercise off the coast of Yeonpyeong. Analysts thought that any immediate conflict could push prices up to $1,425, but without that crisis catalyst gold might just bump along at current levels.

>> Video: What North and South Korea Mean for Gold Prices

Lind-Waldock's Streible has been nibbling away at futures positions "to be positioned before the start of the year because I think right out of the gate I think funds and allocation models are going to start coming out and are going to be more heavily weighted towards metals."

One interesting item to note was earnings from packaged food company ConAgra ( CAG). The company reported a 16% fall in profit in part because of rising commodity costs that the company couldn't pass on to the cash-strapped and discount-minded consumers.

From the Federal Reserve's standpoint, inflation in the U.S. is too low with the last core Consumer Price Index reading for November pegging inflation up 0.6% vs. a year ago. But food companies are saying something different.

ConAgra's CEO Gary Rodkin said "higher-than-planned inflation weighed on Consumer Foods' profits despite progress in overall unit market shares and volume." Rodkin also sees cost inflation accelerating.

Gold is very attractive for investors in times of inflation because the metal retains more of its value as a store of wealth. Many long-term investors had been buying gold as a hedge against inflation, which, as of yet, hadn't materialized. Consistent reports from food providers like ConAgra might reignite this thesis for gold.

Silver prices closed up 3 cents to $29.39 while copper added 7 cents to $4.27.

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Gold mining stocks, a risky but potentially profitable way to buy gold, were mixed. Freeport McMoRan Copper & Gold ( FCX) was up 1.96% at $116.28 while Kinross Gold ( KGC) was 0.49% lower at $18.33. Other gold stocks New Gold ( NGD) and Gold Fields ( GFI) were trading at $9.22 and $17.51, respectively.

-- Written by Alix Steel in New York.

>To contact the writer of this article, click here: Alix Steel.

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