Gold futures rallied near 3 percent on Tuesday, gaining the most in almost seven weeks on speculation of a weaker dollar while platinum surged more than 4 percent to another record high of $2,174 on persisting stockpile concerns from South Africa, the metals top producer.
Gold for April delivery soared $23.70, or 2.6 percent, to end at $929.80 an ounce on the Comex division of the New York Mercantile Exchange. The percentage gain was the biggest for a most-active contract since January 2. Other metals prices also made big gains.
The dollar slipped as much as 0.7 percent against the euro. A weak U.S. currency creates export advantages for buyers using foreign exchange to purchase dollar-denominated commodities, such as gold. The opposite is true when the dollar rebounds.
Gold is up 11 percent this year, reaching a record $942.20 an ounce on January 30.
The major trend is again preparing to assert itself,'' said Dennis Gartman, economist and editor of the Suffolk, Virginia-based Gartman Letter. He recommended buying gold.
The dollar index, which tracks the performance of the greenback against a basket of other major currencies, dropped 0.4 percent to 75.945.
Whether these (commodity) gains last remains to be seen, but for now the less-than inspiring U.S. macro backdrop seems to have taken a back seat to the run we are seeing in commodities, said Edward Meir, an analyst at MF Global, in a research note.
Crude-oil futures soared nearly 5 percent to close above the $100 a barrel mark for the first time ever, on concerns that the Organization of Petroleum Exporting Countries may cut production which boosted prices.
April platinum rallied $89.40, or more than 4 percent, to close at $2,153.10 an ounce. Earlier in electronic trading, the contract hit a new record high of $2,174.0 an ounce.
The precious metal, which is used in used for jewelry and auto-catalysts, has surged to new heights for the last 14 trading sessions and is currently trading 40 percent higher than at the start of 2007 on worries about a widening market deficit.
Again, the recent surges have pushed the metal deeper into overbought territory, said James Moore, an analyst at TheBullionDesk.com, in a note.
He added that with no end in sight to the supply woes it seems the only way is up, with any dips being viewed as buying opportunities.
Also on Nymex, March palladium rallied $47.60, or over 10 percent, to finish at $499.30 an ounce. Earlier, the palladium contract hit an intraday high of $502 an ounce.
Silver futures for March delivery rose 39 cents, or 2.3 percent, to $17.508 an ounce, making it the highest close since December 1980. The metal has increased 17 percent this year.