NEW YORK ( TheStreet ) -- Gold prices shrugged off a stronger U.S. dollar Thursday and broke through key technical levels. Gold for April delivery added $9.80 to close at $1,759.30 an ounce at the Comex division of the New York Mercantile Exchange. The gold price has traded as high as $1,763.80 and as low as $1,743.30 an ounce while the spot price was adding $13, according to Kitco's gold index. Silver prices rose 36 cents to close at $34.17 an ounce while the U.S. dollar index was slightly higher at $78.87.
Gold prices were in somewhat of a holding pattern as investors waited for signs from Greece that it had reached a deal with private bondholders over interest rates on new debt. In the meantime, strong physical buying offset any damage inflicted by a stronger U.S. dollar.
Gold is a hedge against what investors think will be the continued depreciation of currency." Ben Bernanke, Fed Chairman, seemed to reiterate the Fed's commitment to an easy money policy during his testimony today at the House Budget Committee. He said "globally, economic activity appears to be slowing, restrained in part by spillovers from fiscal and financial developments in Europe," meaning that the Fed is focused on potential liquidity issues in the U.S. The Bank of Japan could also be in the spotlight soon with the yen nearing record levels against the dollar which might force an intervention in the currency market. Attempts at currency devaluation could also highlight gold's roll as a safe hard asset. In the meantime, gold prices could be torn between profit taking and technical trading. After rallying 11% in just January, some investors might be looking to book gains. However, the CFTC said in the latest bank participation report that 2,000 long positions were added in January but that there are still more than 161,000 short positions on gold, meaning that banks were still betting against a higher gold price. "Over the past few months, we've see domestic and international bank continuously adding to their short position in gold," says Phil Streible, senior commodities broker at RJO Futures. "I would expect with the recent $100 move higher, the actions by the Fed and the inability for prices to stay below the 200 day moving average for any extended period of time, for them to start covering their short positions." Mihir Dange, president at Arbitrage, says this is a pivotal time for gold. "Volume is a little lighter," he says, "it either means that the resistance will be support when we get through or gold will pull back from here." Dange has been waiting for a $100 move, but has yet to get a read on which direction the price will go. "It is important to keep a close eye on the situation." Gold mining stocks were mixed Thursday. Kinross Gold ( ABX) was flat at $11.26 while NovaGold ( NG) was 8.42% lower at $9.46 after announcing an equity offering. The company increased the size of the offering to 35 million shares at $9.50 citing strong demand. Other gold stocks, Angico-Eagle ( AEM) and Eldorado Gold ( EGO) were trading higher at $37.47 and $15.52, respectively. -- Written by Alix Steel in New York. >To contact the writer of this article, click here: Alix Steel.