Gold prices surged back to life on Tuesday, extending a three-day rally to top $1,700 an ounce for the first time in a month as eurozone jitters and gloomy US consumer data rekindled a dormant safe-haven bid. After several months of trading largely in sync with riskier assets, gold raced nearly 3 percent higher even as stock markets sank, cruising toward its best three-day run since a sharp fall in early August.
The sharp rally coupled with the apparent return of gold's allure as a haven from uncertainty, instability and economic weakness emboldened some bulls, who have been sidelined through a month of range-bound trading. "People are realising that the European situation is not resolving itself, and it's coming to the forefront again. If we can close above $1,700, I think we will see a meaningful jump in the next few weeks and $1,900 is very possible again," Zachary Oxman, managing director at futures broker TrendMax.com.
Spot gold was up 2.9 percent at $1,700.40 an ounce by 2:19 pm EDT (1819 GMT). For this month, however, gold has still underperformed most major asset classes such as equities. US December gold futures settled up $48.10 at $1,700.40 an ounce. Analysts said Tuesday's action was aided by a technical breakout as sizable buy orders emerged with heavy volume following a breach of strong resistance at $1,655 an ounce. Flight-to-quality buying finally reemerged after a flare-up over the European Central Bank and political turmoil in Italy kept the eurozone on edge on the eve of a EU leader summit. Silver was up 4.4 percent at $33.07 an ounce.
Comments
Comments are closed for this article.