Gold surged more than 1 percent to a three-week high on Tuesday, rallying with the stock market on optimism toward the global economy after a bullish forecast by aluminium maker Alcoa. The rise brought bullion back to the 200-day moving average it had fallen below in mid-December, which also improved buying sentiment.
The metal, which entered a bear market two weeks ago, is up nearly 5 percent so far this year. Silver rallied over 3 percent and platinum group metals also gained after Alcoa Inc's revenues beat expectations and the company gave a positive outlook for global aluminium demand, especially in the automotive markets.
Spot gold was up 1.3 percent at $1,631.10 an ounce by 2:11 pm EST (1911 GMT), after rising to a high of $1,639.60. Spot bullion ended the day near its 200-day average at $1,634. US gold futures for February delivery settled up $23.40 an ounce at $1,631.50. Spot silver rose 3 percent to $29.86 an ounce.