Bullion was set to mark its top climb in nearly two months during the Tuesday trade session. The precious metal and the U.S. dollar typically perform the inverse of one another.
The yellowish metal's value as a storage haven fell into demand. Silver futures pushed near its top value in almost 21 days.
"The dollar has weakened, so that is helping gold," head of commodity strategy Bart Melek with TD Securities in Toronto told Bloomberg on Tuesday. "We had seen some aggressive short positions being taken. Some of that is being taken off as many people feel that gold isn't dropping into the precipice. It's no longer a one-way bet."
At 10:44 a.m. on Tuesday, gold futures climbed 2.3 percent, a $28.40 rise to $1,262.60 per troy ounce. Silver futures increased 2.49 percent, a 49-cent lift to $20.36 per troy ounce.
Surge pushes to 2.4 percent
Gold futures achieved a surge as high as 2.4 percent during the Tuesday morning trade session. While bullion was pushing toward the psychological threshold price of $1,300 per troy ounce, the likelihood is high that the commodity will not achieve another year of annual gains. In three weeks gold futures are poised to cease their annual gain bullish trend at 12 years.
The downward dip this year is linked with the progressively recovering U.S. economy, which is the world's largest. Questions are lingering as to when the U.S. Federal Reserve will slash its economy-spurring monetary stimulus measures with confidence high that the Federal Open Market Committee will opt to taper stimulus when the policy-making body convenes two days of meetings next Tuesday and Wednesday.
"We see short covering and some bargain hunting, coupled with signs of some physical demand in China," states a Tuesday report authored by head of precious metals David Govett with Marex Spectron Group in London, according to Bloomberg. "The market is still limited on the upside."
Gains mark $30 lift
MarketWatch reports gold futures shot up as much as $30 per troy ounce on Tuesday.
But the periodic upward spikes that gold futures infrequently have achieved this year are "market events," head of research Adrian Ash with BullionVault told MarketWatch on Tuesday. He noted the metal has lost roughly 25 percent of its value thus far this year.
"The longer-term fundamentals will no doubt come back into play in 2014, however," with "zero rates as far as anyone can see, a deep tolerance, even affection, for inflation amongst central banks, [and] record-high peacetime deficits, with bondholders sure to suffer devaluation, if not default, in the end," Ash told the news source on Monday.
Reuters reports gold futures marked their top value in one week on Tuesday.
The climb was associated with anticipation about next week's Fed policy maker meeting as investors and analysts are looking for indications as to what lies ahead as 2013 closes and 2014 kicks off.
Though gold futures have achieved two consecutive trading sessions of gains as of Tuesday, that bullish trend is unlikely to continue for very long, one investment analyst told Reuters.
"The short-term bullishness is unlikely to last through next week as speculators are likely to trade with more caution closer to the last FOMC meeting of the year," investment analyst Joyce Liu with Phillip Futures Pte Ltd. told Reuters on Tuesday, noting anticipation is ever-mounting as the Fed meeting approaches.
Fed presidents James Bullard of St. Louis and Richard Fisher of Dallas delivered lectures on Monday suggesting that the institution they serve is getting close to tapering, Reuters reports.
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