Easing dollar also helps metal to rebound from recent losses
By Claudia Assis, MarketWatch
SAN FRANCISCO (MarketWatch) — Gold futures advanced on Tuesday, erasing some of their recent losses as concerns about the euro zone eased.
Gold for June delivery GCM2 +0.73% added $13.50, or 0.8%, to $1,645.70 an ounce on the Comex division of the New York Mercantile Exchange.
That comes on the heels of a loss of 0.6% on Monday and a weekly decline of 1%.
Helping gold move along, the dollar weakened further following news U.S. home prices dropped sharply in February, hitting the worst level in nearly a a decade. Read more about the S&P/Case-Shiller index.
A lower dollar is a plus for gold and other dollar-denominated commodities as it makes them cheaper for holders of other currencies.
The dollar index DXY -0.24% , which compares the U.S. unit to a basket of six currencies, recently traded at 79.155, from 79.406 in late North American trading Monday.
European stocks rebounded from a three-month low following fears of political instability after a first-round election in France and the collapse of the Dutch government over the weekend.
Despite the day’s gains, there was still plenty to keep gold investors worried. India’s jewelry demand and interest in physical gold in one of the world’s top buyers “is very slack in spite of the (Hindu festival) Akshaya Tritiya festival this week, which is a concern,” analysts at VTB Capital in London said in a note to clients.
“We still expect volatility to gain ahead of Wednesday’s (Federal Open Market Committee) April meeting, with market participants seeking further insight into the Fed’s monetary policy outlook which will ultimately influence rate expectations and the dollar trade,” they added.
The FOMC is scheduled to make its rate announcement on Wednesday, followed by a press conference by Federal Reserve Charman Ben Bernanke.
Meanwhile, other metals traded higher, with May silver SIK2 +1.52% up 45 cents, or 1.5%, to $30.99 an ounce. May copper HGK2 +1.21% advanced 5 cents, or 1.3%, to $3.67 per ounce.
Claudia Assis is a San Francisco-based reporter for MarketWatch.
