The price of gold was extending gains for a third session Tuesday morning as euro zone worries resurfaced amid uncertain political scenario in Spain.
Gold for April delivery, the most actively traded contract, gained $4.60 to $1,681.00 an ounce. Yesterday, gold edged up to settle higher for a second session mostly on its safe haven appeal over the uncertain political scenario in Spain with opposition parties demanding the resignation of Prime Minister Mariano Rajoy on allegation of corruption. Gold prices also found support with demand from China expected to rise ahead of its New Year beginning next week.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, were unchanged at 1,328.09 tons.
Meanwhile, the U.S. dollar was lingering around its 14-month low versus the euro and leveling off from its 5-month high against sterling. The buck was trading around its two-and half year high versus the yen and ticking higher against the Swiss franc.
In economic news, the euro zone private sector contracted at a slightly slower than estimated pace in January, Markit Economics said. The final composite output index rose to a ten-month high of 48.6 in January and came in above its earlier flash estimate of 48.2. The index climbed from 47.2 in December.
Meanwhile, activity in Germany's private sector economy increased at the fastest rate in nineteen months in January, and the rate of growth exceeded preliminary estimates, final data released by Markit Economics and BME showed.
A report from Eurostat revealed that euro zone retail sales fell more than expected in December, by 0.8 percent from a month ago. The decline was sharper than the 0.1 percent fall logged in November and a 0.5 percent drop forecast by economists.
The prices of silver and platinum were ticking higher in morning deals.
From the U.S., the Institute for Supply Management is scheduled to release the results of its service sector survey for January at 10 a.m. ET. Economists expect the non-manufacturing index to decline to 55.1 from 56.1 recorded in December.
