NEW YORK ( TheStreet ) - Gold prices flirted with $1,800 an ounce Tuesday as a weaker U.S. dollar and safe haven buying supported the metal. Gold for December delivery added $8.10 to settle at $1,799.20 an ounce at the Comex division of the New York Mercantile Exchange. The gold price has traded as high as $1,804.40 and as low as $1,785.10 an ounce while the spot price slid $11, according to Kitco's gold index. Silver prices rallied 32 cents at $35.15 an ounce while the U.S. dollar index was down 0.53% at $76.60.
Investors were ramping up their gold positions as Italy's Parliament voted for 2010 budget items, which had been dubbed a de facto confidence vote for embattled Prime Minister Silvio Berlusconi, who then announced he would resign after passing austerity measures. Any sort of decisive action -- like Berlusconi removing himself from power -- eliminates uncertainty and is positive for the euro, which weighs on the dollar and boosts gold. GLD) added 10 tons Monday. James Moore, research analyst at FastMarkets.com says that this proves investors are interested in gold as a safe haven to preserve wealth. "The yellow metal could extend above $1,800 in the coming sessions." George Gero, senior vice president at RBC Capital Markets, says that recent headlines out of Europe have all added to the open interest in gold -- longer held positions. "Gold is still the haven." The European Central Bank also bought 9.5 billion euros worth of government bonds last week and still Italy's cost of borrowing soared to more than 6.6%. "This gives reason to fear that the ECB will have to expand its bond buying considerably in the coming months," says Commerzbank especially as disagreements remain about how to boost the firepower of the European Financial Stability Fund. Although inflation in the Eurozone is at 3% and ECB President Mario Draghi says prices should fall below the 2% mandated level during 2012, more money in the system leaves investors skeptical of paper money, which leaves gold as a popular hedge. Anthony Neglia, president of Tower Trading, is convinced that "the only way to resolve this
EU crisis is to print our way out." Neglia had been looking for gold to break $2,000 an ounce this year but has pushed out his timeline to the first quarter of 2012. "First time up to a resistance level, even if we have been there before there, is always going to be a stop ... but when we get through $1,923 an ounce it's a bullet train to $2,000." Gold mining stocks were taking a breather after soaring higher Monday. Kinross Gold ( KGC) was down 1.68% to $14.64 while Yamana Gold ( AUY) was 0.88% lower at $16.29. Other gold stocks, Agnico-Eagle ( AEM) and Eldorado Gold ( EGO) were trading mixed at $46.02 and $19.46 respectively. -- Written by Alix Steel in New York. >To contact the writer of this article, click here: Alix Steel.