MW: Gold up for second day as safety buying resumes
By Moming Zhou, MarketWatch
NEW YORK (MarketWatch) -- Gains for gold futures carried over from the previous session, with the precious metal up 2% Tuesday as investors continued to buy gold as a safe haven amid the global turmoil in financial markets.
Gold surged 4% on Monday, while global stock markets tumbled with the Dow Jones Industrial Average falling below the 10,000 mark for the first time since October 2004. U.S. stocks futures traded in a volatile manner Tuesday morning, with investors remaining firmly on guard over the instability in the markets.
Gold "should look to make further gains in the coming days as flight-to-safety demand increases," said James Moore, a precious metals analyst at TheBullionDesk.com.
Gold for December delivery rallied $17.30, or 2%, to $883.50 an ounce on the Comex division of the New York Mercantile Exchange. Gold thus has gained about $50 over the two straight sessions.
Investors are hoping too see coordinated action regarding interest rates involving the Federal Reserve and the European Central Bank. Both Fed Chairman Ben Bernanke and ECB President Jean-Claude Trichet have speeches scheduled Tuesday, and the Fed is due to release minutes from its last rate-setting meeting.
"As the going got tougher, gold got going," said Jon Nadler, senior analyst at Kitco Bullion Dealers. "The metal once again faces a good opportunity to make an assault on the $900 to $925 range."
Australia on Tuesday cut rates by a surprisingly large one percentage point. The Bank of England is expected to cut rates on Thursday, triggering speculation that a coordinated global easing of interest rates may be in the cards. See full story.
The U.S. dollar was moving lower amid rate-cut speculations, helping boost dollar-denominated gold prices. A weakening dollar tends to raise gold prices as it increases the precious metal's appeal as an alternative investment. See Currencies.
In other metals action, platinum for October delivery rose 0.8% to $981 an ounce, while December palladium gained 2% to $205.75 an ounce. December silver rallied 4.4% to stand at $11.78 an ounce.
December copper added 2% to $2.55 a pound.
In spot trading, the London gold-fixing price -- used as a benchmark for gold for immediate delivery -- stood at $881.75 an ounce Tuesday morning local time, up $6.25 from Monday afternoon.