By Claudia Assis and V. Phani Kumar, MarketWatch SAN FRANCISCO (MarketWatch) — Gold futures were back at $1,600 an ounce on Tuesday, rallying alongside oil and stocks and helped by a weaker dollar to start the new year on a high note after a 10% yearly gain in 2011. Gold for February delivery GC2G +2.38% rose $33.10, or 2.1%, to trade at $1,600 an ounce on the Comex division of the New York Mercantile Exchange. It traded as high as $1,602 an ounce earlier. A close around these levels would be the first close above $1,600 an ounce since Dec. 23. Gold rose $25.90 on Friday to pare its losses during the three months ended Dec. 31 to 3.4%. But the metal still ended the year with a net gain of more than 10%, ranking among the best investment classes during a tumultuous year, underpinned by worries about the euro-zone debt crisis. Some analysts remained optimistic about gold in 2012, in anticipation of a boost to the metal’s demand from quantitative-easing measures by the U.S. Federal Reserve and the European Central Bank. Merrill Lynch analysts said they expected gold prices to average $1,850 an ounce in 2012, representing a 17.6% increase over the 2011 spot price average. “We believe the high cost structure of the global gold sector should provide support to hold bullion above the $1,400 [per ounce] level,� they said. Among other metals, the March contract for silver SI2H +5.39% added $1.09, or 3.9% to $28.99 an ounce. March copper futures HG2H +2.34% added 7 cents, or 2%, to $3.51 a pound, while April futures for platinum PL2J +1.43% advanced $16.50,1.2%, to $1,421.40 an ounce. Palladium futures for March PA2H +1.55% added $9.80, or 1.5%, to $665.95 an ounce. The U.S. dollar declined meanwhile, with the ICE dollar index DXY -0.73% slipping 0.1% to 80.081. Claudia Assis is a San Francisco-based reporter for MarketWatch. Varahabhotla Phani Kumar is a reporter in MarketWatch's Hong Kong bureau.

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