Gold futures on the COMEX Division of the New York Mercantile Exchange moved sharply higher on Tuesday, as mounting concerns over a quickly spreading debt crisis in the eurozone prompted investors to flock to the safe-haven of gold. Silver surged 3.7 percent, and platinum also rebounded.
The most active gold contract for February delivery surged 18.6 U.S. dollars, or 1.4 percent, to 1,386.1 dollars per ounce.
The euro remained weak on Tuesday, as investors feared that more lifeline is needed for other weak links in the eurozone such as Portugal and Spain.
Apparently, the 85-billion-euro EU/IMF bailout of Ireland failed to ease the strain on countries that may soon fall prey to a Greek-style debt crisis, or to help investors restore confidence in the battered euro.
Traders said that gold managed to achieve the rally in the face of a stronger dollar, as the frustrating eurozone economy as well as the weakness in U.S. equity markets encouraged some investors to demand gold as a hedge against fiat currencies as well as economic uncertainty. Even the news that Mexican September gold output surged a substantial 18 percent over last year failed to discourage investors.
Meanwhile, the news that China's securities regulators have approved a mutual fund to invest in exchange-traded gold funds outside the nation, which may potentially increase the demand for the bullion, offered a boost to the gold price.
Silver futures for March delivery surged 1.019 dollars, or 3.7 percent, to 28.212 dollars per ounce. January platinum rose 21.8 dollars, or 1.3 percent, to 1,666.4 dollars per ounce.
