Investing.com - Gold prices rose in afternoon trading on Tuesday after an upbeat report on German economic sentiment sent the euro rising over the dollar, often a recipe for rising gold prices.
Gold and the dollar tend to trade inversely with one another.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery were up 0.81% at $1,193.10, up from a session low of $1,182.80 and off a high of $1,204.10.
The December contract settled down 0.18% at $1,183.50 on Monday.
Futures were likely to find support at $1,146.00 a troy ounce, Friday's low, and resistance at $1,235.50, the high from Oct. 28.
The ZEW Centre for Economic Research reported earlier that its German economic sentiment index rose by 15.1 points to a four-month high of 11.5 this month from October’s reading of -3.6.
Analysts had expected the index to improve by 4.5 points to 0.9 in November.
In addition, the index of euro zone economic sentiment increased to 11.0 in October from 4.1 in September, above expectations for an increase to 4.3, and the better-than-expected data gave the euro a shot in the arm.
The single currency has softened against the dollar in recent sessions as investors prepare for U.S. monetary policy to grow less accommodative while Europe moves in the opposite direction,
European Central Bank President Mario Draghi said on Monday that policymakers will do what it takes to bolster the European economy.
Draghi said "unconventional measures" needed to ensure recovery could involve the purchases of sovereign debt, a monetary policy tool known as quantitative easing that aims to suppress long-term borrowing costs to spur recovery, which weakens paper currencies and boosts stock prices to boost the economy.
The ECB’s current stimulus program includes purchases of asset-backed securities and covered bonds
Tuesday's European economic sentiment data eclipsed an uptick in U.S. wholesale prices, which gave prices room to rise as the dollar took a breather from its recent rally.
The Commerce Department reported earlier that producer prices inched up by a seasonally adjusted 0.2%, confounding forecasts for a 0.1% decline, after falling 0.1% in September.
Year-over-year, the U.S. producer price index rose at 1.5% in October, outpacing expectations for a 1.2% increase and following a gain of 1.6% in the preceding month.
The core producer price index, which is stripped of volatile food and energy components, eased up by a seasonally adjusted 0.4% last month, beating expectations for a gain of 0.2% and following a flat reading in September.
Core producer prices rose 1.8% year-on-year in October, surpassing forecasts for 1.5% and up from 1.6% in the preceding month.
The Federal Reserve pays close attention to core prices when determining monetary policy.
Elsewhere, silver for December delivery was up 0.47% at $16.133 a troy ounce, while copper futures for December delivery were down 1.29% at $3.000 a pound.