By Nick Godt, MarketWatch
NEW YORK (MarketWatch) -- Gold futures advanced on Tuesday as evidence of growth in the global economy pressured the dollar and rekindled inflation concerns, which traditionally boosts interest in gold as a hedge.
U.S. stocks opened higher, with the Dow industrials up 10 points, ahead of more U.S. reports on pending home sales and testimony from Treasury Secretary Timothy Geithner and Paul Volcker, chairman of President Obama's Economic Recovery Advisory Board.
On Monday, gold rose 2% after a batch of economic reports boosted hopes for the global economic recovery and pressured the dollar.
In recent action, the dollar index (DXY 79.16, -0.08, -0.10%) , which tracks the greenback against a trade-weighted basket of six major currencies, fell 0.1% to 79.08.
Gold investors also believe that budget deficits in the U.S. and globally are lifting gold's appeal as a hedge.
Analysts at Goldcore wrote gold's gains on Monday followed details of Obama's proposed budget. The dollar fell, they noted, after news of "the massive record post World War II budget deficits and long term inflation concerns."
"And the U.S. is not alone in facing significant fiscal challenges; euro zone states have taken on record debt levels," Goldcore analysts wrote.
