NEW YORK ( TheStreet ) -- Gold prices Tuesday hit their lowest levels since October as the metal tested a key support level. Gold for February delivery managed to close off of its lows but still fell $12.20 to $1,332.30 an ounce at the Comex division of the New York Mercantile Exchange. The gold price Tuesday has traded has high as $1,338 and as low as $1,321.90. The spot gold price was holding up, supported by physical buying. It was down only $4.40, according to Kitco's gold index. The Chinese have been big buyers headed into their new year, which begins Feb. 3. The U.S. dollar index was down 0.04% to $77.99 while the euro was adding 0.23% to $1.36 vs. the dollar. The U.S dollar had been stronger for most of the session and although not the primary factor, it certainly didn't help gold's selloff or any bargain-hunters looking to enter the market. "Traders dump gold" was the headline of the day signaling that gold's rally Friday and Monday as well as the SPDR Gold Shares' ( GLD) 20-ton addition on Friday were, in fact, just technical buying. Options expiration Saturday forced many traders, who were short gold, to buy gold or the GLD to protect themselves against any losses. Now that options expiration is behind us, traders are abandoning their positions. The GLD lost 11 tons Monday as the Dow Jones Industrial Average climbed toward 12,000, making stocks perhaps a more valuable investment. "Yesterday's net redemption takes the month's outflow to 22.7 tons," wrote Barclays Capital in its daily commodity briefing. Silver fared better -- the iShares Silver Trust ( SLV) added more than 83 tons. Silver is a currency like gold and also a recovery metal like copper. Although silver typically moves in tandem with gold it has more volatility because it is a thinner market. Also, the better investors feel about a global economic recovery, the more they think countries will spend on construction and infrastructure, and the more likely silver prices will find support. George Gero, senior vice president at RBC Capital Markets, wrote that "81,000 open interest came out of gold." Gero believes this will help bargain hunters get back into the market but they must be patient and willing to endure this shakeout. Phil Streible, senior market strategist at Lind-Waldock, is cautious on the gold market and is waiting for "critical levels of support like $1,320, $1,300 and $1,270. I might take a shot there. The key is you can't get overleveraged in this type of environment. If you are ... you definitely have to use those rallies to lighten up a little bit." Jim Cramer outlined with me in a video Tuesday a good way to trade gold in January. "Trade gold as a short ... for an investment it's a long ... They can be two different things." Cramer says if he was at his hedge fund he would be buying gold puts against his existing gold position and then reversing that trade at the end of the month. Cramer's Gold Trade One concern, of course, is that gold prices have put in a triple top, something traders and technicians don't like to see. Cramer makes the point, however, that consumers in China and India don't care about chart patterns and that the supply/demand thesis is still intact.