Gold rallied 2 percent on Tuesday boosted by a disappointing US consumer confidence report and by a top Federal Reserve official saying that strong and prolonged central bank accommodation is warranted given poor US economic growth.
Gold accelerated gains early in the session after Chicago Fed President Charles Evans told CNBC television he backs "some of the most aggressive policy actions" now being considered by the Fed, adding the labour market, with its 9.1 percent jobless rate, looks to be in a recession.
Other perceived safe havens, such as Treasuries, also rose and equity markets fell after data showed US consumer confidence crumbled in August to its lowest in more than two years. "Certainly, there is very little confidence among the major macro-type investors about which way the global economy is going to go over the next three to six months," said Credit Suisse Tom Kendall.
"There is very little conviction one way or the other and that is very supportive of gold," he said. Bullion now gained as much as 8 percent in the last three sessions, largely supported after Fed Chairman Ben Bernanke raised hopes for a new market stimulus program on Friday.
Spot gold was up 2 percent at $1,822.50 an ounce by 1:22 pm EDT (1722 GMT). Gold fell by more than 1 percent last week, when investors stripped more than $200 off the price after it hit a record $1,911.76 on August 23. US gold futures for December delivery was up $34.20 at $1,825.70 an ounce. Silver was up 1.1 percent at $41.24 an ounce.
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