NEW YORK ( TheStreet) -- A resurgence in investment demand propped up gold prices Monday, but the ongoing battle between profit-takers and bargain-hunters promises to keep gold in a tight range.

Gold for February delivery added $3.50 to $1,344.50 an ounce at the Comex division of the New York Mercantile Exchange. The gold price traded as high as $1,352.40 and as low as $1,340.70 during Monday's session, while the spot gold price gave up its gains and dipped $2.70, according to Kitco's gold index.

The U.S. dollar index was down 0.18% to $78.07 while the euro was flat at $1.36 vs. the dollar.

Gold exchange-traded fund investors were hot for shares Friday. SPDR Gold Shares ( GLD) added almost 20 tons in one day as investors jumped on gold's 5.6% 2011 selloff to buy the metal. iShares Gold Trust ( IAU), the less expensive ETF, has not lost or added since Dec. 23.

Silver didn't fare quite as well as the silver ETF -- iShares Silver Trust ( SLV) -- dropped 180 tons on Friday. Important to keep in mind is that Saturday was options expiration and the same kind of tonnage increase in the GLD happened in last month. Prior to options expiring on Dec. 18, also a Saturday, the GLD added 15.18 tons on Dec. 17 as traders sought gold to hedge their future contracts.

Whether the increase Friday signals technical trading or a new buyer, this kind of schizophrenia in the precious metal trade won't die out anytime soon as traders battle with a risk on/risk off mentality.

"The build in SPDR holdings Friday again indicates the scale of pent-up demand below the market due to ongoing concerns over debt-default in the eurozone and rising inflation fears," argues James Moore, research analyst at

The uptrend for gold and silver will largely depend on investor dip-buying. Investors are unlikely to commit a huge amount of new money to gold and silver if they think there could be another selloff or if they feel better about a global recovery. But big double-digit declines will entice some traders to buy up the metal.

David Morgan, founder of, is still not buying any gold or silver. "I might try to scale in on the way down if we get low enough. Right now the next support level, and it's a good one, is about $1,330 for gold so I am going to watch this one very closely," Morgan says.

Even if gold does bounce, which it is doing Monday, prices could still retrace and come back towards the $1,330 level, Morgan says.

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