Silver, palladium among top gainers among metals on Tuesday

Gold futures rose 1.5% Tuesday to end at their best in four weeks, breaking a two-session losing spell as the dollar traded lower and other commodities also gained.

Gold for February delivery  added $23.40, or 1.5%, to settle at $1,631.50 an ounce on the Comex division of the New York Mercantile Exchange. That was gold’s highest close since Dec. 13.

Gold traded as high as $1,641.40 an ounce, and as low as $1,609.20 an ounce earlier.

The metal tracked gains for other commodities and equity markets on Tuesday, with investor sentiment buoyed by European leaders’ efforts to deal with the region’s debt problems and as the dollar lost some steam.

In addition, after liquidation late last year in stocks some buyers are going to gold, said Stephen Platt, analyst with Archer Financial Services in Chicago.

Gold was also finding support in lingering concerns about Iran’s threats to close off the Strait of Hormuz, a critical conduit for oil tankers, he added.

Nevertheless, gold is likely to remain in “a choppy trading range pattern,” Platt said, pegging resistance at around $1,680 to $1,700 an ounce in the short term.

Meanwhile, the dollar gained some steam as investors cheered a day without bad news from Europe, which lifted the euro — until, at least, the next headline.

German Chancellor Angela Merkel and French President Nicolas Sarkozy met in Berlin on Monday, and Merkel said that there has been some progress toward implementing tougher budget rules across the euro zone.

Monday’s meeting between the two leaders “merely marked the start of the marathon negotiations set to take place over the next few weeks,” analysts at Commerzbank said in a note to clients.

Still, markets remain “in the grip of the sovereign-debt crisis in the euro zone, with auctions of Spanish and Italian government bonds due at the end of the week,” and this has lent support for gold, they said.

Among other metals futures, March copper  settled higher, regaining some strength on the last stretch of trading. The contract rose 10 cents, or 2.8%, to $3.51 a pound.

March silver  also gained, advancing $1.03, or 3.6%, to $29.82 an ounce.

Palladium for March delivery  rose $17.35, or 2.8%, to $635.20 an ounce, while April platinum   gained $35, or 2.5%, to finish at $1,464.60 an ounce.

Open interest in platinum futures broke a record 43,855 contracts on Monday, the CME Group said late Tuesday. The previous record of 43,810 contracts had been set in February 2011.

On the foreign-exchange front, the dollar index , which tracks the U.S. currency against six others, slipped to 80.895, down from 81.001 late Monday. A weaker greenback tends to encourage buying in dollar-priced commodities.  - MarketWatch

Posted by Silver Guru on Jan 11 2012. Filed under Silver prices. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry