By Barbara Kollmeyer, MarketWatch
Editors note: Corrects spelling of name of Federal Reserve official Janet Yellen
MADRID (MarketWatch) — Gold prices firmed up on Tuesday, moving in step with higher global stock markets and a weaker dollar, and as investors looked forward to a potential rate cut out of Europe this week.
Gold for delivery in April GCJ3 +0.74% rose $8.40, or 0.5%, to $1,580.80 an ounce in electronic trading.
A day prior, gold rose 10 cents to settle at $1,572.40 an ounce, finding a footing after three straight declines.
Weaker global stocks and worries about automatic spending cuts kicking in in the U.S. have weighed on the precious metal. But global stocks were pushing higher on Tuesday, after the Dow industrials DJIA +0.27% closed at their second-highest level ever. U.S. stock futures were also moving higher. Read: Stock gains lifts Dow average to 2nd highest level
Federal Reserve Vice Chair Janet Yellen also said Monday that the central bank shouldn’t scale back on its easy policy stance. Analysts said nonfarm-payrolls data out at the end of this week should also not deter the Fed from quantitative easing. Read: Fed's Yellen: Full steam ahead on QE3
Loose monetary policies generally support gold’s draw as an inflation hedge.
In Asia, mainland Chinese stocks closed up 2.3%, recouping some of the prior day’s 3.7% slump, which was the worst loss since Aug. 11. That loss was brought on by new property-buying restrictions for China, to cool home prices.
The Stoxx Europe 600 index XX:SXXP +1.44% rose 1.3%, with markets moving up in anticipation that the European Central Bank might cut interest rates later this week. Read: China stocks stage strong bounce
As appetite for stocks rose, the dollar fell, which also acted as a support for gold. The ICE dollar index DXY -0.19% , a measure of the greenback’s moves against six major currencies, fell to 82 from 82.214 in the U.S. late on Monday.
A weaker dollar makes dollar-priced commodities cheaper for buyers of other currencies. Read: U.S. dollar slips as Aussie climbs on RBA's pulse
Across the wider metals complex, May silver SIK3 +1.89% rose 39 cents to $28.89 an ounce, a gain of 1.4%.
Platinum was another big gainer. The April futures contract PLJ3 +0.26% leaped nearly $27, or 1.7%, to $1,593 an ounce.
June palladium PAM3 +1.82% rose $12.35, or 1.7%, to $726.80 an ounce.
Copper for delivery in May HGK3 +0.61% rose 2 cents to $3.52 a pound.
Barbara Kollmeyer is an editor for MarketWatch in Madrid. Follow her on Twitter @bkollmeyer.
