Prompts for the precious metal's upward tick include the weakening dollar, as the greenback and bullion typically perform the inverse of one-another. The value of the world's reserve currency has dropped for
three of the past four sessions when held against counterpart currencies. The embattled shared currency of the European Union has been on the uptick, most recently pushed by the European Central Bank preparing to open three-year loans on Wednesday to regional banks that have suffered from damages caused by the sovereign debt crisis.
Wednesday's liquidity boost marks the second time since the middle of December of last year that the ECB has taken on the effort to strengthen regional banks' liquidity needs.
"The dollar's weakness is supporting gold," senior research analyst Rick Trotman with MLV & Co. in New York told Bloomberg.
At 2:46 p.m. on Tuesday, gold futures climbed 0.6 percent, a $10.70 lift to $1,785.60 per troy ounce.
The precious metal is driving toward the milestone price of $1,800 per troy ounce.
MarketWatch attributes the precious metal's climb to the reduced value of the dollar as well as value buying.
The dropping of the dollar saw the euro climb, which one analyst said are two factors that prompt the uptick of gold futures.
"We've got a very nice jump for the euro," precious metals analyst Jim Steel with HSBC in New York told MarketWatch. "That has lifted gold up pretty strongly."
The climb for the euro is attributable to the long-tem re-financing operation set to ensue on Wednesday. The LTRO is designed to alleviate pressure and tension endured by euro zone banks suffering under the strain of the sovereign debt crisis, which has been ravaging regional banks, markets and public finance systems during the past two-plus years.
In mid to late December 2011, regional banks capitalized on the LTRO to the tune of $657 billion worth of euros. Analysts are eyeing figures within the same area.
Reuters notes that silver futures also benefited from a healthy performance on Tuesday as the whitish metal gained 4 percent at one point. The volatile metal touched its highest price in five months when exceeding $35.70 per troy ounce.
"Both gold and silver are lifted by an expectation of continued liquidity coming into the market," head precious metals trader Frank McGhee with Integrated Brokerage Services told Reuters. "Massive fund buying and predominantly technical factors boosted silver, which was undervalued compared to everything else and we are covering a lot of the ground today."
At 3:08 p.m. on Tuesday, silver futures climbed 4.13 percent, a $1.471 lift to $37.075 per troy ounce.
The record price for silver is $50.35 per troy ounce, as established in January 1980 when the Hunt brothers of Texas attempted to corner the market.
The record price for gold futures is $1,923.70 per troy ounce as set early this past September.
Thus far this year, silver futures have increased 32 percent in value, significantly outdoing gold futures. But the precious metal is known as the volatile metal for good reason. Despite its strong performance thus far this year, silver futures have lost 10 percent of their value after coming less than $1 from exceeding two benchmarks: the psychological barrier of $50 per troy ounce and the record price.
Within weeks, silver futures spearheaded the commodity complex' downward drive and rested in the early $30s per troy ounce.
One analyst told Reuters that the price of gold is likely to continue climbing in the coming sessions due to what is happening with the central bank of Europe.
"I think at this point in time, the markets are well aware of what the ECB is going to do. I don't think it is likely to act as a further catalyst for strengthening gold prices," analyst Daniel Brebner with Deutsche Bank told Reuters.
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