Gold Prices Rise Amid Short-Covering (Update 1)

Updated from 10:58 a.m. EST with video interview and settlement prices

NEW YORK (TheStreet) -- Gold prices rose Tuesday as investors took to short-covering on the yellow metal.

Gold for February delivery rose $7.90 to settle at $1,660.80 an ounce at the Comex division of the New York Mercantile Exchange. The gold price traded as high as $1,665 and as low as $1,653.50 an ounce, while the spot price was tacking on $8.50, according to Kitco's gold index.

"Thousands of contracts of 1700 strike puts were in the money and so short covering ensued this morning to re-align portfolios," George Gero, precious metals strategist at RBC Wealth Management, wrote in a note on Tuesday. Gero also said in a phone interview that Monday's report of December durable goods orders, which came in better than expected, suggested the economy has been on the mend -- a signal that more buying could be somewhat inflationary in the near term.