By Polya Lesova & Myra P. Saefong, MarketWatch
FRANKFURT (MarketWatch) -- Gold futures rose 2% on Tuesday, joining a broad-based rally in commodities, as dollar weakness heightened the appeal of the precious metal.
Gold for April delivery rose $22.60, or 2%, to $1,112.60 an ounce in electronic trading on Globex.
The April contract is the most actively traded. It earlier climbed to an intraday high of $1,117.50 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 $1.3643 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 80.12, -0.22, -0.27%) , which tracks the performance of the greenback against a basket of other major currencies, slipped to 80.156 from 80.259 in late European trading on Monday.
Oil futures also gained, with the March contract up 1.4% to $75.19 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.
Analysts at Credit Suisse said many traders were absent Monday because of 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," the analysts said.
Also on Globex on Tuesday, March silver futures rose 31 cents, or 2%, to $15.76 an ounce.
March copper futures gained 6.60 cents, or 2%, to $3.149 a pound.
