Gold Rises on Spain Bank Bailout Doubts (Update 1)

NEW YORK (TheStreet) -- Gold prices jumped Tuesday, benefiting from investor uncertainty about Spain's $125 billion bank bailout plan.

Gold for August delivery added $17 to settle at $1613.80 an ounce at the Comex division of the New York Mercantile Exchange. The gold price traded as high as $1,618.90 and as low as $1,586.40 an ounce during Tuesday's session, while the spot price closed up $13.70, according to Kitco's gold index.

Silver prices settled up 33 cents at $28.95 an ounce while the U.S. dollar index was 0.22% lower at $82.45.

"You should still continue to see gold prices advance, and you're going to see it advance faster against the Euro currency," said Phil Streible, senior commodities broker at RJO Futures. "People are concerned; they think that the Spanish banks are going to fail."

Continued questions surrounding the eurozone should drive more buying, Steible said, but he added that the Greek election this weekend and next week's Fed meeting could make it tough to sustain.

"If the Greek elections come in well, you're going to see the party keep ... the Eurozone intact," Steible said. "You might see gold stabilize because they still anticipate Greece is going to need additional bailout."

Among the gold miners, Kinross Gold(KGC) added 1.5% to close at $8.34; and Randgold Resources(GOLD) gained 3% to $89.78.

Other gold stocks on the rise included Agnico-Eagle Mines(AEM) , which finished up nearly 5% at $41.25; and Eldorado Gold(EGO) , which closed up 4.5% at $12.13.

--Written by Joe Deaux in New York.

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