Gold futures on the COMEX Division of the New York Mercantile Exchange inched up on Tuesday, as tension in Libya and Middle East continued to boost safe-haven demands, but the rising momentum turned weaker following five consecutive hikes.
The most active gold contract for April delivery rose 1.2 U.S. dollars, or 0.08 percent, to 1,427.6 dollars per ounce.
Market analysts said the news from the Northern Africa and the Middle-east not only increased safe-haven buying, but sent crude oil prices soaring, which also helped underpin gold market as inflationary expectation could prompt investors to buy gold as a hedge against inflation.
New York crude oil further gained 1.67 dollars to settle at 104 dollars per barrel on Tuesday.
However, a Chicago analyst noted the European Central Bank (ECB) statement of “strong vigilance”on inflation probably signaled that a hike in interest rate is on the way and many predicted the ECB will raise rates next month, which weighed on the sentiment to some extent.
A trader said investors usually flock to gold every time prices hover around 1,400 dollars, but sell it when it hits the 1,440 dollars mark.
But over the long term, the trader said he expects “renewed strength in the metals as it becomes evident that the Federal Reserve is likely to continue its accommodating monetary policies.”
Meanwhile, silver for May delivery also climbed 26.8 U.S. cents, or 0.7 percent, to close at 36.269 dollars. But April’s platinum lost 5.5 dollars, or 0.3 percent, to 1739.4 dollars.