Gold prices took a jump on Tuesday after China hinted fresh economic stimulus could be on the way in the next few months. Precious metals prices also rose on dollar weakness due to hopes that the European Central Bank will step up their efforts to help euro-zone countries.
By Claudia Assis and Sara Sjolin
Aug. 21, 2012, 10:38 a.m. EDT
SAN FRANCISCO (MarketWatch) — Gold futures rose on Tuesday after China hinted fresh economic stimulus could be on the way in coming months, and as the dollar was weaker on hopes the European Central Bank will step up efforts to help peripheral euro-zone economies.
Gold for December delivery GCZ2 +1.05% advanced $17.60, or 1.1%, to 1,640.70 an ounce on the Comex division of the New York Mercantile Exchange.
Prices on Monday settled at the highest level since mid-June, at $1,623 an ounce.
Gold was supported by monetary easing hints from China as the Chinese state-run Xinhua news agency’s Economic Information Daily reported that Beijing is planning fresh stimulus measures for the second half of the year.
A weaker dollar also supported gold prices. The ICE dollar index DXY -0.71% , which measures the greenback against a basket of six other currencies, fell to 81.900 from 82.475 in late North American trade the prior day.
Dollar-denominated commodities tend to rise on a weaker dollar, as they get cheaper to buy for holders of other currencies.
The euro rallied Tuesday on the ECB expectations. There’s growing market optimism Europe’s monetary authorities will take steps to reduce borrowing costs for countries such as Spain and Italy.
On Monday, however, the central bank said a report over the weekend that it was weighing a plan to cap sovereign-debt yield spreads was “misleading“ and Germany‘s central bank renewed its opposition to any bond-buying efforts.
Elsewhere in the metals complex, platinum for October delivery PLV2 +0.39% lost 70 cents, or 0.1%, to $1,497.20 an ounce. The metal closed at its highest since early May on Monday following recent gains amid violence at a platinum mine in South Africa.
September silver SIU2 +2.25% rose 64 cents, or 2.3%, to $29.23 an ounce, while copper for the same month HGU2 +2.21% moved 8 cents higher, or 2.4%, to $3.45 a pound.
Palladium for September delivery PAU2 +1.74% gained $10.45, or 1.7%, to $618.15 an ounce.
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