By Myra P. Saefong, MarketWatch
TOKYO (MarketWatch) -- Gold futures climbed Tuesday in Asian trading hours, adding as much as $20 an ounce to Friday's levels in New York, as concerns related to debt in Greece and a weaker U.S. dollar combined to lift the metal's investment appeal.
Buying is "tied to [the] Greek financial problems and possibility of a short-term top in the U.S. dollar being established," said Darin Newsom, a senior analyst at Telvent DTN.
Gold's rally also comes after the metal's recent "test of key support" near the $1,030 level, he said.
Gold for April delivery climbed to a two-week high of $1,110.30 an ounce in electronic trading on Globex in Asia's late afternoon trading. That's its strongest intraday level since Feb. 2.
The contract's climb represented a 1.9% gain over Friday's closing level in New York. Prices for the contract had finished Friday with a loss of 41 cents, as China's move to slow the pace of bank lending triggered a rally in the U.S. dollar and a sell-off in commodities. See Friday's metals story.
On Monday in Asia, the dollar was slightly weaker against some major foreign rivals, which tends to boost dollar-denominated commodities such as gold. The Dollar Index (DXY 80.16, -0.17, -0.22%) , which tracks the performance of the U.S. unit against a basket of other major currencies, was nearly flat at 80.14 after a slight decline earlier.
Analysts at Credit Suisse said many traders were absent Monday, due to the Chinese Lunar New Year festival and the U.S. President's Day holiday.
"Due to illiquid market conditions, we would not over-interpret this move," they said in a note to clients Monday. "From a purely seasonal perspective, March is the worst month of the year for gold" and real interest rates have risen recently, which adds to the "downside risks."
And on a technical level, Newsom said the long-term monthly chart for gold turned bearish in January, "indicating pressure could emerge after this short-term rally."
