WASHINGTON (MarketWatch) -- Gold futures climbed as much as $21 an ounce Monday, poised to extend gains from the previous session, with weakness in the U.S. dollar providing a boost to investment demand for the precious metal.
"The steadier tone in equities and softer dollar has prompted some buying interest on the European opening, but given the scale of events this week traders are unlikely to be particularly aggressive on either side of the spread," said James Moore, an analyst at TheBullionDesk.com, in a research note.
Gold is likely to spend more time consolidating between $710 and $740, he said.
Gold for December delivery gained $13.30, or 1.8%, to trade at $740.10 an ounce in electronic trading on Globex. The contract had surged to $748.20 earlier.
On the Comex division on the New York Mercantile Exchange, December gold was up $18.20, or 2.5%, at $745 an ounce.
Other metals saw broad gains as well.
The dollar and the yen lost ground against most major currencies Tuesday, slipping as equity markets rose on a further rise in risk appetite, strategists said. See Currencies.
"Even the most sanguine, tunnel-visioned bull would have to admit that the fundamentals of the U.S. economy are bad and deteriorating," said Mark O'Byrne, a director at Gold and Silver Investments Ltd.
On Wall Street, U.S. stocks opened higher Tuesday as Americans headed to the polls to cast their ballot for the country's next president. See Market Snapshot.
In a note to clients, O'Byrne said he believes U.S. Sen. Barack Obama looks set to become the 44th U.S. president and "there is a hope that he may regain America's respect in the world with a return to more restrained and sane fiscal, economic and foreign policies."
But "the honeymoon is likely to be very short as the new president will face the greatest challenge since the Great Depression of the 1930's," O'Byrne said.
So for now, "deflationary pressures continue to be prevalent and central banks internationally continue to aggressively cut interest rates in an effort to stimulate credit growth and inflate their way out of a possible Depression," he said.
Against this backdrop, prices for silver followed gold higher in electronic trading. December silver gained 63 cents, or 6.5%, to $10.38 an ounce.
Among the base metals, December copper rose 4.3% to $1.9195 a pound.
December palladium rose 4.8% to stand at $212.10 an ounce, while January platinum fell 1.7% to $841.30 an ounce.
