NEW YORK ( TheStreet ) -- Gold prices rallied Wednesday on a weaker U.S. dollar despite the Fed's reluctance to pump more money into the system. Gold for December delivery added $17.80 to settle at $1,739.60 an ounce at the Comex division of the New York Mercantile Exchange and prices were adding more than $20 in after-hours trading. The gold price has traded as high as $1,745.60 and as low as $1,715.50 an ounce while the spot gold price was popping $10, according to Kitco's gold index. Silver prices jumped $1.21 to close at $33.94 an ounce while the U.S. dollar index was down 0.33% at $77.08.
Gold prices were breathing a sigh of relief Wednesday as the U.S. dollar cooled off, making the metal cheaper to buy in other currencies. The dollar index had rallied almost 3% since Friday which had dragged down all assets, especially gold. Experts think the two should continue to move inversely to each other in the short term creating more volatility.
the Fed would be a big mover but that investors are still really focused on Greece and the euro."
The euro was climbing modestly against the dollar, which was also helping gold, as doubts arose as to whether Greece's parliament will approve a referendum on the country's next bailout. According to reports, Greek Prime Minister George Papandreou's cabinet supported the measure but he might be one vote short of support in Parliament after one party member defected and three others threatened to vote against it. A referendum would not only prevent a swift and decisive resolution to Greece's debt problem but also throw the whole Eurozone into turmoil. If Greeks voted to not pass austerity measures and not receive more aid, the country couldn't pay its bills, which would hurt countries and banks that own its debt and would lead to Greece having to leave the euro so it could print its own money. Many traders are skeptical of the metal's ability to launch a big rally. "My ultimate downside is $1,580 and below that $1,535 an ounce," says Anthony Neglia, president of Tower trading. "
My upside is that $1,800 level that we missed last week. I would like to see it trade above that level before we can rekindle a good fourth quarter bull trend." Gold mining stocks were clawing higher Wednesday. Kinross Gold ( KGC - Get Report) was down slightly at $14.34 while Yamana Gold ( AUY - Get Report) was up 1% to $15.12. Other gold stocks, Agnico-Eagle ( AEM - Get Report) and Eldorado Gold ( EGO - Get Report) were climbing higher at $43.72 and $19.20, respectively. Randgold Resources ( GOLD - Get Report) was popping 3.20% to $113.81 after the company reported earnings. The company made $1.17 a share versus Reuters estimates of $1.42 on revenue of $309.6 million. Gold production was 182,362 ounces, light by just 2,000 ounces, but profits were up 335% year-over-year and 29% sequentially as several mines ramped up and the civil war in the Ivory Coast was resolved. Randgold is still in a growth spurt,. which can cause production stumbles, but now has access better gold, which will help its production rate and cash costs, which were $747 an ounce for the third quarter. The company had to lower 2011 production guidance recently after severe floods and is currently on track to produce 740,000-760,000 ounces this year. -- Written by Alix Steel in New York. >To contact the writer of this article, click here: Alix Steel.