Investing.com - Gold prices climbed above the $1,200-level on Tuesday, as investors sought shelter from steep losses in oil and equity markets, amid lingering fears of a global economic slowdown.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery tacked on $12.50, or 1.03%, to trade at $1,207.20 a troy ounce during European morning hours.
A day earlier, gold picked up $4.50, or 0.38%, to settle at $1,194.90.
Futures were likely to find support at $1,186.40, the low from December 5, and resistance at $1,213.50, the high from December 4.
Also on the Comex, silver futures for March delivery jumped 16.9 cents, or 1.04%, to trade at $16.44 a troy ounce.
Oil prices continued to tumble on Tuesday, following falls of more than 4% on Monday, as investors piled on to their short positions in anticipation of lower prices into the new year amid concerns over a growing supply glut.
Meanwhile, in Asia, China’s Shanghai Composite plunged more than 5% to record its biggest one-day loss since August 2009 as investors headed for the exits amid growing concerns over the health of China's economy.
Stock markets in Europe were also sharply lower after the open, with Germany's DAX dropping 1%, while Spain's IBEX 35 and Italy's FTSE MIB both lost more than 1.5%.
Gold’s appeal as a safe-haven is boosted during times of economic uncertainty.
Despite recent gains, gold prices are likely to remain vulnerable in the near-term amid indications a strengthening U.S. economic recovery will force the Federal Reserve to start raising interest rates sooner and faster than previously thought.
The Wall Street Journal reported that Fed officials are looking at dropping an assurance that interest rates will stay low for a "considerable time", in its statement, ahead of its upcoming policy meeting next week.
Expectations of higher borrowing rates going forward is considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise.
Elsewhere in metals trading, copper for March delivery dipped 0.5 cents, or 0.17%, to trade at $2.881 a pound.