NEW YORK (TheStreet ) -- Gold prices were climbing higher Monday as the metal shinned as a safe-haven asset.
Gold for February delivery was adding $7.60 to $1,386.80 an ounce at the Comex division of the New York Mercantile Exchange. The gold price has traded as high as $1,388.90 and as low as $1,377.
The U.S. dollar index was up 0.01% to $80.37 while the euro slid 0.22% to $1.31 vs. the dollar. The spot gold price was rising more than $10, according to Kitco's gold index.
Gold prices were shrugging off a stronger U.S. dollar as investors bought gold as protection against escalating tensions between North and South Korea.
South Korea went ahead with military exercises off the coast of Yeonpyeong, despite the fact that North Korea threatened retaliation, echoing its attack on the island in November which killed four people. South Korea had asked civilians to seek shelter as a precaution.
Investors were buying gold as protection against any potential conflict as a safe place to preserve their wealth. Gold was also benefiting from uncertainty in Europe. Although European Union leaders agreed to a permanent crisis-lending facility starting in 2013, there was no immediate aggressive action announced out of the EU summit last week.
Worries are escalating the Spain might be on the chopping block. The government might be in OK shape but the soaring debt of its banks and citizens might overwhelm the government and the debt market. The aggressive downgrade of Ireland by Moody's Friday didn't help matters as the ratings agency warned that Spain's credit rating was also on review.
"Further pockets of profit-taking ... are likely in the run-up to year-end but as has been seen this morning the mix of economic and geo-political woes will continue to underpin the complex," says James Moore, research analyst at fastmarkets.com.
The popular gold exhange-traded fund, SPDR Gold Shares(GLD), added more than 15 tons of gold on Friday. Tonnage in the less expensive iShares Gold Trust(IAU) has remained unchanged at 116.63 tons.
David Morgan, founder of Silver-Investor.com, thinks that $1,400 gold prices might be done for the year. "This time of year most traders square their books ... I'm flat personally ... I'm happy just to rest out the rest of this year." January could see a flurry of activity as traders buy back some of their gold positions.
