NEW YORK (TheStreet) -- Gold prices were relatively flat Monday as investors were distracted by a slew of mergers and acquisitioon news and tentatively bought stocks.
Gold for December delivery was adding 50 cents to $1,229.30 an ounce at the Comex division of the New York Mercantile Exchange. The gold price Monday has traded as high as $1,234 and as low as $1,227.30. The U.S. dollar index was slipping 0.11% to $82.96 while the euro was flat at $1.27 vs. the dollar. The spot gold price Monday was up 10 cents, according to Kitco's gold index.
The recent wave of M&A activity continued Monday as a bidding war between Dell(DELL) and Hewlett-Packard(HPQ) over 3Par(PAR) heated up.
Consolidation is typically a positive for equities because it signals that companies have cash and want to grow, which can lead investors into riskier stocks rather than safer gold.
Last week's M&A, however, was overshadowed by fears that a global economic recovery was stalling out, which helped push gold prices past $1,230 an ounce and up 1%. But with volume thinning and a lack of any major economic data Monday, traders appear more optimistic and are ignoring gold.
Regardless of any price dips, gold is expected to show resilience as the metal waits for fall's busy buying season. "[Gold] does not really want to go much below the $1,200 level," says David Morgan, founder of Silver-Investor.com. "What I expect is a minor sympathetic move with the stocks market to the downside, but very briefly, and then immediately go up ... and that would show that gold is doing its job [as a wealth protector]."
This week investors will look for direction from data on the housing market with July new and existing home sales numbers as well as durable goods orders which measures the purchasing health of consumers and businesses.
Silver prices were down 5 cents to $17.94 while copper was flat at $3.29. Morgan thinks that silver will suffer over the long term if stocks selloff. "You see silver actually sympathize more with the S&P." ... I think we may see it in the low $17s, perhaps below $17 before we find a more recent bottom."
Gold mining stocks, a risky but profitable way to buy gold, closed slightly lower Friday. Barrick Gold(ABX) was down 0.22% to $44.78 while Newmont Mining(NEM) fell 0.72% to $58.02. Other large gold stocks Randgold Resources(GOLD) and Goldcorp(GG) closed at $90.63 and $41.89, respectively.
