It is the highest level for gold futures as they settled on Tuesday. The other markets however, have been rattled and don't appear to be settling any time soon.
February gold picked up $3.20, or 0.3%, to settle at $1,078.40 an ounce—its highest settlement since Dec. 21 when gold ended at $1,080.60.
“Unrest in the Middle East and weak Chinese economic data released Monday are working in favor of the yellow metal,” said Jim Wyckoff, senior analyst at Kitco.com.
Equities saw a global selloff Monday, sparked by worries about an economic slowdown in China and sectarian tensions between Iran and Saudi Arabia, which helped drive volatility in crude oil.
“Markets are in a very much risk-off scenario with investors not wanting to start the year off with big losses so the riskier assets are suffering, such as equity markets,” said James Hughes, chief market analyst, at broker GKFX, in a Tuesday research note.
Wyckoff noted that there was “still some anxiety in the marketplace Tuesday, but not as much as Monday.”
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Attempting to calm nerves, China injected some 130 billion yuan ($19.9 billion) into the country’s financial system Tuesday, a day after the Shanghai Composite Index plunged nearly 7% following a weaker-than-expected manufacturing report.
Despite the recent spate of bullishness around gold, the long-term prospects for the commodity and other precious metals remains muted, given the rising dollar. The ICE U.S. Dollar Index a gauge of the buck against a measure of six currencies, was up by 0.6% Tuesday.
A stronger greenback can diminish the appeal of dollar-denominated assets, making them more expensive to buyers using other currencies.
“It remains to be seen how much longer could gold resist the rising dollar; if this week’s U.S. macro data point to an improvement in the world’s largest economy, stocks could bounce back and rise along with the dollar, reducing the need for safe havens,” said Fawad Razaqzada, technical analyst at Forex.com in a Tuesday report.
Razaqzada refers to the Labor Department’s employment report, due Friday, which could reinvigorate the U.S. stock market, if the data prove stronger than analysts’ forecasts. Consensus forecasts point to a rise of 204,000 jobs in December, according to an estimate of analysts polled by MarketWatch.
In other metals, high-grade copper for March delivery which is the most sensitive to fear of global sluggishness, picked up 1.6 cents, or 0.8%, to $2.096 a pound, after the industrial metal sank 2.6% on Monday.
Meanwhile, April platinum gained $5.50, or 0.6%, to finish at $890 an ounce, but March palladium declined by $8.45, or 1.6%, to settle at $535.75 an ounce.