Forexpros – Gold futures were up for a third day on Tuesday, as traders remained cautious ahead of Wednesday’s critical European Union summit, while strong physical demand in Asia continued to underpin prices.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,659.05 a troy ounce during early European trade, climbing 0.41%.
It earlier rose by as much as 0.68% to trade at USD1,664.65 a troy ounce, the highest price since October 19.
German Chancellor Angela Merkel and fellow European leaders will meet in Brussels tomorrow for a second summit in four days to find ways to boost the powers of the region’s bailout fund and to restructure Greece’s sovereign debt.
The U.S. dollar was lower against most of its major counterparts, while the dollar index, which tracks the performance of the U.S. dollar against a basket of six other major currencies, was down 0.1% to trade at 76.30, the lowest since September 9.
Dollar weakness usually benefits gold, as it boosts the metal’s appeal as an alternative asset and makes dollar-priced commodities cheaper for holders of other currencies.
Strong physical demand in Asia continued to support prices. Buyers in India, the world’s largest gold consumer, bought the precious metal as one of the major gold-buying festivals of Diwali was set to start on Wednesday.
Consumer in China, the world’s second largest gold buyer, increased purchases as demand typically picks up during the National Day holidays at the start of October and lasts through the Lunar New Year in January.
Meanwhile, Mark Cutifani, chief executive of AngloGold Ashanti, the world’s third largest gold producer said that gold prices could “easily” rise to USD2,200 an ounce in the next two years, as global financial concerns persist.
Speaking at an industry event in Perth, Australia earlier, Mr. Cutifani said that the soaring gold price is “far from bubble territory”, while adding that the price “probably reflects the fundamentals in the industry”.
Elsewhere on the Comex, silver for December delivery rose 0.34% to trade at USD31.75 a troy ounce, while copper for December delivery jumped 1.12% to trade at a one-month high of USD3.487 a pound.
Forexpros
