11:16 am - Monday June 24, 2024

PRECIOUS-Gold rises 2 pct as year-end jitters knock stocks, dollar

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Gold rose 2 percent on Tuesday, while silver jumped more than 4 percent as the dollar weakened and stock markets slid, with concerns over tension between Russia and the West also helping push the metal through key chart levels.

Spot gold rose to a session high at $1,209.90 an ounce, up 2.3 percent, and was up 1.5 percent at $1,200.20 an ounce by 2:15 p.m. EST (1915 GMT). U.S. gold futures for February delivery settled up $18.50 an ounce, or 1.6 percent, at $1,200.40.

Silver was up 2.9 percent at $16.21 an ounce, after rising 4.4 percent to a session high at $16.45.

A wave of risk aversion swept through global markets on Tuesday, with end-of-year caution and worries about Greece’s future in the euro zone pushing European shares down. A drop in oil prices also hurt sentiment.

Among currencies, the dollar index fell 0.3 percent, pressured by strength in the yen as investors sought the traditional safety of the Japanese currency amid end-of-year nerves over economic risks ahead.

“Gold… has been on something of a roller coaster for the past few days,” Ed Meir, an analyst at INTL FCStone, said.

Gold traders said the metal was also being lifted by concerns over tensions between Russia and the West. Russia’s Foreign Ministry said on Tuesday that a widening of U.S. sanctions against Moscow this week may hamper bilateral cooperation on some issues.

“Gold was heavily bid at the opening of the Comex… up to a high of $1,202.80 on the Feb 2015 contract as it hit a flurry of stops above 1190 and 1200 in shallow liquidity,” one London-based trader said.

Despite the choppy session’s rally, the market was viewed as technically bearish as it remained below the long-term resistance level at $1,235.

“The one encouraging thing for the bulls today is that today’s volume is stronger than what we’ve seen lately, but until we close above $1,235, bulls shouldn’t get excited,” said Teddy Sloup, senior market strategist for iiTrader in Chicago.

For the year, gold is down less than 1 percent, hurt by a stronger dollar and expectations of an interest rate rise in the United States.

Some physical buying in China helped to support gold prices. Premiums in Shanghai were steady at about $4 an ounce on Tuesday.

Spot platinum gained 1.9 percent to $1,215.24 an ounce and spot palladium fell 0.7 percent to $800.30 an ounce.

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