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.
THIS MATERIAL IS CONVEYED AS A SOLICITATION FOR ENTERING INTO A DERIVATIVES TRANSACTION.
THIS MATERIAL HAS BEEN PREPARED BY A DANIELS TRADING BROKER WHO PROVIDES RESEARCH MARKET COMMENTARY AND TRADE RECOMMENDATIONS AS PART OF HIS OR HER SOLICITATION FOR ACCOUNTS AND SOLICITATION FOR TRADES; HOWEVER, DANIELS TRADING DOES NOT MAINTAIN A RESEARCH DEPARTMENT AS DEFINED IN CFTC RULE 1.71. DANIELS TRADING, ITS PRINCIPALS, BROKERS AND EMPLOYEES MAY TRADE IN DERIVATIVES FOR THEIR OWN ACCOUNTS OR FOR THE ACCOUNTS OF OTHERS. DUE TO VARIOUS FACTORS (SUCH AS RISK TOLERANCE, MARGIN REQUIREMENTS, TRADING OBJECTIVES, SHORT TERM VS. LONG TERM STRATEGIES, TECHNICAL VS. FUNDAMENTAL MARKET ANALYSIS, AND OTHER FACTORS) SUCH TRADING MAY RESULT IN THE INITIATION OR LIQUIDATION OF POSITIONS THAT ARE DIFFERENT FROM OR CONTRARY TO THE OPINIONS AND RECOMMENDATIONS CONTAINED THEREIN.
PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE PERFORMANCE. THE RISK OF LOSS IN TRADING FUTURES CONTRACTS OR COMMODITY OPTIONS CAN BE SUBSTANTIAL, AND THEREFORE INVESTORS SHOULD UNDERSTAND THE RISKS INVOLVED IN TAKING LEVERAGED POSITIONS AND MUST ASSUME RESPONSIBILITY FOR THE RISKS ASSOCIATED WITH SUCH INVESTMENTS AND FOR THEIR RESULTS.
TRADE RECOMMENDATIONS AND PROFIT/LOSS CALCULATIONS MAY NOT INCLUDE COMMISSIONS AND FEES. PLEASE CONSULT YOUR BROKER FOR DETAILS BASED ON YOUR TRADING ARRANGEMENT AND COMMISSION SETUP.
YOU SHOULD CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR CIRCUMSTANCES AND FINANCIAL RESOURCES. YOU SHOULD READ THE "RISK DISCLOSURE" WEBPAGE ACCESSED AT WWW.DANIELSTRADING.COM AT THE BOTTOM OF THE HOMEPAGE. DANIELS TRADING IS NOT AFFILIATED WITH NOR DOES IT ENDORSE ANY TRADING SYSTEM, NEWSLETTER OR OTHER SIMILAR SERVICE. DANIELS TRADING DOES NOT GUARANTEE OR VERIFY ANY PERFORMANCE CLAIMS MADE BY SUCH SYSTEMS OR SERVICE.
GLOBAL ASSET ADVISORS, LLC (“GAA”) (DBA: DANIELS TRADING, TOP THIRD AG MARKETING AND FUTURES ONLINE) IS AN INTRODUCING BROKER TO GAIN CAPITAL GROUP, LLC (GCG) A FUTURES COMMISSION MERCHANT AND RETAIL FOREIGN EXCHANGE DEALER. GAA AND GCG ARE WHOLLY OWNED SUBSIDIARIES OF STONEX GROUP INC. (NASDAQ:SNEX) THE ULTIMATE PARENT COMPANY.