Markets worldwide shrugged off persisting worries over EU sovereign debt, U.S. fiscal and monetary policy, the condition of “too big to fail” banks and China’s economy Tuesday morning. Instead, the focus is on fourth-quarter earnings and signs that economic activity and employment conditions have been improving.
Spot gold was trading some 1.5% higher Tuesday morning, with a bid price of $1,635.30 per ounce and an ask price of $1,636.35. Spot gold traded as high as $1,641.70 and as low as $1,630. The London afternoon reference price fix came in at $1,637, $22 per ounce above Monday’s reference price, according to Kitco market data. UBS forecast that the average price of gold will be $2,050 per ounce in 2012 and hit a peak of $2,500.
Spot silver was up nearly 3.6%, bid at $30.09 per ounce with an ask price of $30.19. The morning high as of time of writing was $30.45 and the low was $29.78. Tuesday’s reference price was set at $29.69 in the London a.m., 84 cents per ounce higher than Monday’s price fix.
Gold bullion for spot market delivery rose above $1,638 per ounce in London morning trading Tuesday — the first time in three weeks — while the spot price of an ounce of silver bullion jumped 4.5% from last week’s close, according to BullionVault‘s London Gold Market report.
German and other eurozone government bond yields fell ahead of a Thursday meeting of the European Central Bank. It’s expected ECB monetary policy makers will cut interest rates below 1% for the first time.
“Precious metals are benefiting from a broad-based buying across asset classes,” Standard Bank’s Marc Ground said. Technically, the November 2008 uptrend line, which lies at $1,532.62, underpins spot gold’s weekly chart, Commerzbank technical analyst Axel Rudolph added.
Turning to Tuesday morning activity on U.S. exchanges, gold and silver trusts were moving up sharply.
Gold and silver mining ETFs were surging higher.
Gold mining shares were heading higher, with Yamana Gold (NYSE:AUY) up more than 3%.
Silver mining shares also were showing sharp gains mid-morning Tuesday.
As of this writing, Andrew Burger did not hold a position in any of the aforementioned securities. Adrian Ash of BullionVault contributed to this report.