MW: Gold futures rise as firmer euro depresses dollar
By Sarah Turner and Sara Sjolin, MarketWatch
LONDON (MarketWatch) — Gold futures extended gains on Tuesday as the euro partly recovered from the previous day’s sell off, weakening the U.S. currency and making dollar-denominated commodities more attractive for other currency holders.
Gold for April delivery GCG3 +0.98% gained $4.30, or 0.3%, to trade at $1,680.70 an ounce.
The yellow metal climbed $5.80, or 0.4%, to $1,676.40 an ounce on the Comex division of the New York Mercantile Exchange in regular trading Monday as political turmoil in Europe ramped up, even as the euro fell against the dollar.
The euro EURUSD +0.2660% reversed on Tuesday, to reach $1.3557 from $1.3511 in late North American trading on Monday. Read: Spain, Italy concerns spur euro profit-taking
“Gold is historically positively correlated to the euro,” said precious-metals strategists at HSBC. “The bullion market may focus on the upcoming European Central Bank meeting and its corresponding euro reaction, we believe,” the strategists said.
The euro found support in a broader risk-on sentiment on European financial markets, fueled partly by a better-than-expected purchasing managers’ index for January. Markit’s euro-zone composite PMI rose to 48.6 from an earlier estimate of 48.2, marking a ten-month high. See: Euro-zone PMI signals downturn eased in January
The euro gains further helped depress the dollar, lending support to gold futures.
The ICE dollar index DXY +0.49% DXY +0.49% , which measures the greenback against a basket of six rivals, fell to 79.488 from 79.589 in late North American trading on Monday. Read about currencies.
U.S. stock futures pointed to a higher open on Wall Street. See: Stock future rise ahead of home prices, ISM
Gains were seen across the metals complex, as silver for delivery in March SIH3 +1.94% ticked up 31 cents to $32.02 an ounce and copper for delivery in March HGH3 +1.05% traded 1 cent higher at $3.77 a pound.
April platinum PLJ3 +0.26% put on $5.80 to $1,703.40 an ounce while March palladium PAH3 +1.38% rose 90 cents to $758.70 an ounce.
Sarah Turner is MarketWatch's bureau chief in Sydney. Follow her on Twitter @SarahTurnerMKTW.
Sara Sjolin is a MarketWatch reporter based in London. Follow her on Twitter @sarasjolin.
