By Polya Lesova, MarketWatch NEW YORK (MarketWatch) -- Gold futures ended with modest gains Tuesday, as the dollar's weakness against the yen helped propel buying of the precious metal. Gold for February delivery rose $4.90 to end at $774.20 an ounce on the New York Mercantile Exchange. Earlier, the contract hit an intraday high of $780.70 an ounce in electronic trading on Globex. In the currency markets, the dollar fell sharply against the Japanese yen, but was mixed against other major currencies. Dollar weakness typically boosts dollar-denominated commodities such as gold. The dollar index , which tracks the performance of the greenback against a trade-weighted basket of six major currencies, traded at 85.91 compared with 85.618 in North American trading late Monday. See Currencies. Gold ended up $17.10 to $769.30 an ounce Monday on the New York Mercantile Exchange. The metal finished last week down 8.2%, the first such loss since the week ended Oct. 31. "Gold remains very oversold and continues to consolidate and build a firm base," said Mark O'Byrne, executive director of Gold and Silver Investments Ltd., in a research note. "Technically speaking, gold suffered serious damage in recent weeks," he said. On Wall Street, U.S. stocks fell, putting the brakes on two straight sessions of gains, as companies including Texas Instruments Inc., FedEx Corp. and Danaher Corp. offered gloomy earnings projections. See Market Snapshot. "Work-force cuts and plant closures at Sony, Novellus and Dow Chemical continued to add numbers to the growing list of such news coming from every corner of the global economy," said Jon Nadler, senior analyst at Kitco Bullion Dealers. Sony Corp. said it plans to cut 8,000 jobs worldwide. Read more about Sony. South Africa's gold output falls Gold production in South Africa fell by 14% year-on-year in October, the government reported. The country's total mining production, however, rose by 3.5% year-on-year in October, with non-gold output rising 6.5%. South Africa is the world's largest platinum producer and the second-biggest gold producer after China. South Africa's annual output could be as much as 1 million ounces lower this year compared with 2007, O'Byrne said, adding that the country's gold output has been falling since 1970. "Power issues with the state-owned power utility Eskom, which suffered a near collapse in the electricity grid in January, have also contributed to the recent decline in production," he said. "Of the world's three biggest gold producers -- China, South Africa and Australia, only China has managed to increase gold production in recent years," O'Byrne said. "This means that the supply/demand balance in gold is becoming increasingly tight and likely to lead to markedly higher prices in the coming years." Also on the Nymex, other metal futures ended mixed. March silver futures fell 12 cents to $9.85 an ounce and January platinum futures dropped $30.80 to end at $812.50 an ounce. March palladium futures gained $4.30 to $179.50 an ounce, while March copper futures fell 6 cents to end at $1.44 a pound. On the equities side, the Amex Gold Bugs Index , which tracks the share prices of major gold companies, gained 1% to 231.17 points.

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