By Polya Lesova & Nick Godt, MarketWatch
NEW YORK (MarketWatch) -- Gold futures rose 2.5% on Tuesday, joining a broad-based rally in commodities, as dollar weakness heightened the appeal of the precious metal.
Metals held onto gains after the New York Federal Reserve said manufacturing activity expanded at a faster pace in February in its region.
The Empire State manufacturing index rose to 24.9 in February from 15.9 in January.
Gold for April delivery rose $27.30, or 2.5%, to $1,117.10 an ounce in electronic trading on Globex.
The April contract is the most actively traded. It earlier climbed to an intraday high of $1,121.4 an ounce.
Gold gained "on the back of the stronger euro," said James Moore, an analyst at TheBullionDesk.com, in a note to clients.
"The metal is vulnerable to a euro-related pullback and now needs to clear resistance around $1,125 to cement more bullish sentiment," Moore said.
The euro rose 0.3% to $1.3658 in recent trading, as euro-zone finance ministers are scheduled to meet in Brussels to discuss Greece's public finances, among other issues.
Worries over Greece's high public debt have recently pressured the euro and boosted the dollar. Gold futures tend to fall when the dollar rises.
The dollar index (DXY 80.19, -0.14, -0.17%) , which tracks the performance of the greenback against a basket of other major currencies, slipped to 80.127 from 80.259 in late European trading on Monday.
Oil futures also gained, with the March contract up 2.7% to $76.10 a barrel.
Gold trading was closed in the U.S. on Monday. Gold prices fell on Friday to end at $1,090 an ounce on the New York Mercantile Exchange, 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.
Also on Globex on Tuesday, March silver futures rose 40 cents, or 2.6%, to $15.85 an ounce.
March copper futures gained 9 cents, or 2.8%, to $3.17 a pound.
