NEW YORK ( TheStreet ) -- Gold and silver prices rallied Monday on safe haven buying as the U.S. dollar index gave up gains. Gold for August delivery added $2.90 to close at $1,542 an ounce at the Comex division of the New York Mercantile Exchange. The gold price has traded as high as $1,548.20 and as low as $1,533.60, while the spot gold price was adding $1.20, according to Kitco's gold index. Silver prices rose 32 cents to close at $36.07 an ounce. The U.S. dollar index was flat at $75.01, as the euro was slightly lower.
With no resolution to Greece's debt crisis, investors were buying gold and silver as protection against a worldwide, double-dip recession. Both metals were weaker in early-morning trading as a stronger dollar weighed on prices, but gold and silver quickly rallied as panicked investors needed some place to put their cash. U.S. stocks were higher but still bouncing around some risky key support areas. European Union finance ministers were unable to come to an agreement on another bailout package for Greece as well its next chunk of money from its first bailout. Officials were reportedly waiting for a €28 billion austerity bill to pass the Greek Parliament. The measure has been causing protests and strikes in Athens. Prime Minister George Papandreou now must fight for his political life at a confidence vote late Tuesday. Gold and silver's safe haven status isn't a sure thing, however, as uncertainty in Greece pushes the dollar higher vs. the euro, a headwind for all dollar-priced commodities. Gold and silver "remain more vulnerable to downside pressure in the short term with the lack of clear agreement of financial aid to Greece increasing the likelihood of a broad rout of risk appetite, which would drag gold initially lower," says James Moore, research analyst at FastMarkets. Moore does point to the 9-ton increase in the SPDR Gold Shares ( GLD) Friday as reason to believe that safe-haven buying will support prices for the long term. Gold and silver prices also will have to contend with the Federal Reserve's two-day FOMC meeting, which ends Wednesday. Although no change in the interest rate is expected, gold will be reacting to how the Fed will exit its current $600 billion bond buying program, which is scheduled to end this month, and how it will deal with slow growth vs. rising inflation.