According to our sharetips expert,Gold futures surged in mid U.S. trade Tuesday on a weaker dollar and euro zone optimism.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery traded at USD1632.75 a troy ounce during mid U.S. trade surging 1.53%.
It earlier hit a high of USD1637.15, the highest since December 14th.
Our sharetipsexpert say's Gold futures were likely to find support at USD1606.05 and technical resistance exists at USD1645.65, the high of December 14th.
Weakness in the U.S. dollar usually works to lift precious metal prices. The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, gave back 0.21% to trade at 81.14.
A weaker U.S. dollar normally lifts gold prices as it increases the metals appeal as an alternative asset and makes dollar priced commodities less expensive for holders of other currencies.
Gold broke above its 200 day moving average triggering technical buying by trend following funds adding to the bullish environment.
Rating agency Fitch made it clear that it will not downgrade France this year, but warned that an Italian downgrade is pending.
For much of the last year, investor's typical reaction to bad news from Europe was to buy gold, as its boosts safe haven appeal of the precious metal, but that relationship has unraveled recently.
Instead, gold futures have moved largely in line with other commodities and risk assets over the past month, with investors preferring the relative safety of the U.S. dollar.
Elsewhere on the Comex, silver for March soared 3.88% to trade at USD29.90 a troy ounce, while copper for March delivery moved higher by 2.74% to trade at USD3.51 a pound.