Investing.com - Gold rose to a 12-week high on Tuesday, before trimming some of those gains as the U.S. dollar strengthened and stock markets rebounded from the previous day's losses.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery rose by as much as 0.92% to hit a session high of $1,244.30 a troy ounce, the most since October 23, before trading at $1,235.80 during U.S. morning hours, up $3.00, or 0.24%.
A day earlier, gold jumped $16.70, or 1.37%, to settle at $1,232.80, as heavy losses in the oil and equity markets drove investors towards traditional safe-haven assets.
Futures were likely to find support at $1,217.50, the low from January 12, and resistance at $1,250.20, the high from October 22.
The US dollar index, which measures the greenback against a basket of six major currencies, hovered near a 12-year peak, as oil prices continued their selloff, adding to worries over the outlook for global growth and inflation.
London-traded Brent prices plunged $1.66, or 3.41%, to $47.07 a barrel, while Nymex oil sank $1.46, or 3.16%, to end at $44.62.
U.S. stocks were broadly higher after the open on Tuesday, following two days of losses on the S&P 500, as upbeat results from Alcoa helped ease concerns regarding the corporate earnings season.
The euro was trading close to a nine-year low amid speculation the European Central Bank will embark on full blown quantitative easing as soon as its next meeting on January 22.
Gold remained supported after the latest U.S. jobs report last week showed a surprise drop in hourly wages, suggesting that the Federal Reserve could keep rates on hold for longer.
The precious metal lost nearly 2% in 2014 amid indications a strengthening U.S. economic recovery will force the Fed to start raising interest rates sooner and faster than previously thought.
A delay in raising interest rates would be seen as bullish for gold, as it decreases the relative cost of holding on to the metal, which doesn't offer investors any similar guaranteed payout.
Also on the Comex, silver futures for March delivery rallied 42.9 cents, or 2.59%, to trade at $16.99 a troy ounce, after hitting a daily peak of $17.13, the most since December 15.
Elsewhere in metals trading, copper for March delivery tumbled 7.5 cents, or 2.74%, to trade at $2.651 a pound, after hitting a daily low of $2.639, a level not seen since August 2009.
Strong trade data from China, the world’s largest copper consumer, failed to boost sentiment.
The Asian nation reported a trade surplus of $49.6 billion in December, broadly in line with expectations. Exports jumped 9.7% in December, but imports rose by a smaller-than-forecast 2.4%, pointing to weak domestic demand.
According to the data, China imported 420,000 tons of copper in December, unchanged from November.
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