LONDON: Gold hit record highs above $1,200 an ounce on Tuesday as dollar weakness refueled buying of the metal as an alternative asset, while investors speculating on more gains were cheered by its recovery from last week’s losses.
Strength in gold lifted other precious metals, with silver and palladium both rallying to their strongest since July 2008, and platinum hitting its highest since August last year.
Spot gold hit a peak of $1,200.70 an ounce and was bid at $1,198.70 an ounce at 1631 GMT, against $1,179.10 late in New York on Monday.
Prices could push further through the $1,200 an ounce level to new record highs if the dollar continued to weaken, analysts said.
The dollar fell against a basket of six other currencies on Tuesday as waning worries about Dubai’s debt, Australia’s interest rate hike, and upbeat euro zone data dimmed the greenback’s safe-haven appeal.
The dollar also pared gains against the yen after comments from the Bank of Japan on monetary policy.
Weakness in the US unit boosts gold’s appeal as an alternative asset and makes dollar-priced commodities cheaper for holders of other currencies.
Meanwhile, oil climbed more than $1 to above $78 a barrel on Tuesday. US crude for January delivery rose $1.25 to $78.53 a barrel by 11:33 EST (1633 GMT). Brent crude added $1.03 to $79.50.
Leading European stock markets surged more than 2.0 percent Tuesday after Asian exchanges extended a rally and Wall Street opened higher as investors breathed easier on news of fresh moves to ease Dubai’s debt woes.
In Paris the CAC 40 added 2.60 percent to close at 3,775.74 while in Frankfurt the DAX gained 2.68 percent to 5,776.61 points.
Elsewhere there were gains of 2.86 percent in Milan, 2.84 percent in Brussels, 1.87 percent in Madrid, 1.77 percent in Zurich and 3.12 percent in Amsterdam.
US stocks pushed higher ahead of a slew of economic data that could shed light on the strength of recovery momentum.
The Dow Jones Industrial Average was up 1.23 percent at 10,471.65 at mid-day while the tech-heavy Nasdaq had risen 1.37 percent to 2,174.06.
Asian share markets were also steady after bouncing back on Monday.
The MSCI index of Asia Pacific stocks traded outside Japan was up 0.3 percent while the Thomson Reuters index of regional shares was down 0.6 percent.
Japan’s Nikkei index was down 1 percent as profit-taking emerged after the market jumped nearly 3 percent on Monday.
Japanese government bond futures hit a 10-month high after Finance Minister Hirohisa Fujii boosted expectations for further monetary easing by the Bank of Japan as the yen’s recent march to a 14-year high against the dollar has raised the risk of deepening deflation.
Shares in Australian carrier Qantas however jumped 3.5 percent after the airline announced a 7 percent rise in October passenger numbers.