NEW YORK (TheStreet ) -- Gold prices were rising slightly Wednesday after shedding 1.5% of their value on a broad market selloff the day before.
Gold for December delivery was adding $2.80 to $1,341.20 an ounce at the Comex division of the New York Mercantile Exchange. The gold price Wednesday has traded as high as $1,343.10 and as low as $1,330.10.
The U.S. dollar index was adding 0.02% to $79.23 while the euro was rising slightly to $1.35 vs. the dollar. The spot gold price was up $2.60, according to Kitco's gold index.
Gold, for now, seems to have stemmed its furious selloff from Tuesday as investors stepped in to buy gold at lower prices. But gold prices will probably stay in no-man's land as uncertainty in Ireland weighs on the euro, helps the dollar and caps any gains in gold.
Prices plummeted through the key $1,350 an ounce support level Tuesday and were close to breaking down even further to $1,315, but investors jumped in and tentatively bought the dip. Jed Handwerger, editor of GoldStockTrades.com, is looking for a correction to $1,250 before he re-enters the market.
"I would be looking for specific patterns ... this recent breakout ... was not really a strong breakout," says Handwerger who is still looking for a dollar bounce and is urging investors to be cautious. "I've told my readers to be 100% defensive we have a lot of different issues in the markets right now ... we have to be careful of a significant correction."
Promising to weigh on gold prices is the threat of China raising interest rates to fight inflation. The U.S. Department of Labor also said Wednesday that the core Consumer Price Index, an inflation indicator, was unchanged in October month over month. Possible decreasing inflation in China and no inflation in the U.S. are hurting investors who bought gold as an inflation hedge.
Also, the International Monetary Fund, eurozone and European Union are pressuring Ireland to take a bailout. Reportedly, Ireland's finance minister will meet with officials from the European Central Bank, EU and IMF on Thursday to broach the topic of aid and to examine the health of Irish banks.
