Investing.com - Gold prices rose sharply on Tuesday, as some investors emerged out of the holiday lull to hunt for bargains as the market entered the last trading stretch of the year.
Gold for February delivery on the Comex division of the New York Mercantile Exchange rose by as much as 1.6% to a session peak of $1,151.70 a troy ounce, a level not seen since December 14.
It was last at $1,144.15 by 7:15AM ET (12:15GMT), up $10.55, or 0.93%. Prices of the yellow metal sank to an 11-month low of $1,124.30 earlier in December.
The precious metals market was closed on Monday due to the Christmas holiday.
Trading volumes are expected to remain light due to the holiday period as many traders already closed books before the end of the year, reducing liquidity in the market and increasing the volatility.
Gold futures are on a seven-week losing streak, the longest down stretch in more than 12 years.
Prices of the yellow metal have fallen sharply since Donald Trump was elected president as a soaring U.S. dollar, rising Treasury yields and a record-breaking rally on Wall Street have damped its appeal.
Market analysts warned that the outlook for gold remains cloudy in the near-term, given expectations for higher U.S. interest rates in the months ahead.
The Fed hiked interest rates for the first time in a year earlier this month and projected three more increases in 2017.
The precious metal is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar in which it is priced.
Both a strong dollar and higher interest rates are typically bearish for gold, which is denominated in dollars and struggles to compete with yield-bearing assets when borrowing costs rise.
Also on the Comex, silver futures for March delivery jumped 26.8 cents, or 1.7%, to $16.02 a troy ounce during morning hours in New York, rebounding from last week's eight-month low of $15.67.
Meanwhile, platinum rallied 1.5% to $908.25 and palladium added 1.2% to $662.62 an ounce.
Elsewhere in metals trading, copper futures declined 0.5 cents, or 0.2%, to $2.474 a pound.