Reply #20: Gold gains, but trade off highs on oil weakness

[54anickel]

Futures prices off high of $611; silver prices still higher

http://www.marketwatch.com/News/Story/Story.aspx?guid={CF70FA19-A21D-43D6-B575-4561EEB6B3D5}&siteid=mktw&dist=nbk

SAN FRANCISCO (MarketWatch) -- Gold futures rose Monday afternoon but traded off the session's high above $611 an ounce, as the market found support from a retreat in the U.S. dollar but also saw pressure from weakness in oil prices.

Gold for February delivery was last up $2.40 at $609.30 an ounce on the New York Mercantile Exchange, retreating from an earlier high of $611.10.

The contract, which on Friday touched its lowest level since late October, lost $31.10, or 4.9%, last week, hurt by unexpected strength in the dollar, worry about an economic slowdown and recent weakness in energy futures.

"While gold is hovering very much near critical support, there are no guarantees that the almost 3% fall recorded in the last session has been halted," said Jon Nadler, an investment-products analyst at bullion dealers Kitco.com.

"Gold cannot be immune to a commodity bubble cave-in, at least in the initial phases thereof," he said, adding that "there is collateral damage to be incurred by gold simply by virtue of its proximity to other commodity metals."

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