MW: Gold prices try to sustain gains in volatile trade
By Claudia Assis & Kate Gibson, MarketWatch
SAN FRANCISCO (MarketWatch) -- Gold prices seesawed on Tuesday, most recently resuming an early climb and extending gains to a second consecutive day.
Gold for June delivery, the most-active contract, rose $1.80 to $1,195.80 an ounce on the Comex division of the New York Mercantile Exchange.
"Barring short-term price corrections in light of profit-taking and meeting margin requirements, we would expect gold prices to regain their upward momentum as safe haven buying remains robust and supports interest in the metal," analysts at Barclays Capital said in a note to clients Tuesday.
Coin sales have also been strong, as US Mint data shows gold coin sales have reached 158,000 ounces May, already more than double year-ago levels, they added.
Gold turned higher following a report that showed a drop in U.S. home prices in March.
The Standard & Poor's Case-Shiller home price index fell 0.5% in March in 20 U.S. major cities. Prices were up 2.3% in the past year, however, the second consecutive gain.
Gold rose $17.90, or 1.5%, to end at $1,194 an ounce on Monday.
Despite the early trading fluctuations, safe-haven "is anticipated on dips as European debt concerns remain, along with a rise in geopolitical risk after North Korea went on a military footing," said analysts at Action Economics.
During the weekend, Spain seized a small savings bank, CajaSur, offering an example of what euro-zone governments are contending with as they try to stem a debt crisis.
North Korea has been accused of sinking a South Korean warship in March, leading to plans for a joint military exercise by the U.S. and South Korea.
Geopolitical tensions "in the Korean peninsula also have to be viewed with increasing alarm given how unpredictable and paranoid the North Koreans can be," MF Global analysts said in a report to clients on Tuesday.
On Wall Street, stocks opened lower as the Dow Jones Industrial Average (DJIA 9,840, -226.68, -2.25%) fell below 10,000 for the first time since February.
Markets at large were consumed by a combination of worries, including Korean tensions, Spanish bank concerns and a rising inter-bank lending rate, with the major indexes down steeply on Monday.
