Gold Heads Toward $1,390/oz On Euro Worries (NG, AEM, GLD, EGO)

Moody's said it has put Portugal on review for a possible downgrade, according to Reuters article this morning. Moody's downgraded Irish debt on Friday and said on Monday it may cut the ratings on Spanish banks. Spot gold was bid at $1,385/oz in early morning trading, U.S. gold futures for February delivery rose 40 cents to $1,386.50. "Recent strength in the dollar and gold has been tied to increasing concerns over the health of the euro, especially after the ECB voiced concern yesterday over Ireland's newly passed debt restructuring law," MF Global said in a note. Gold has risen 26 year-to-date, with euro debt conflicts fueling the upward momentum. Traditionally, the precious metal is a hedge against a falling currency and inflation. However the euro has been weakening as gold prices have been rising. The gold manufacturers have been rising as well, playing such stocks as NovaGold Resources NG, Agnico-Eagle Mines AEM, SPDR Gold Trust GLD, Eldorado Gold EGO.