Calmer Markets Boost Gold

Updated from 12:02 p.m. EST

Gold climbed Tuesday as stocks calmed and bargain hunters took advantage of the relatively tranquil market to buy bullion.

Contracts for April delivery of gold rose $7 to close at $646.20 an ounce on the Comex divison of the Nymex. The gold exchange-traded funds, iShares Comex Gold Trust (IAU Quote) and streetTracks Gold Shares(GLD Quote), both were gaining about 1.7% recently.

"With gold back under $650, the physical sector is quite keen to take a look at buying again," says James Moore, an analyst at TheBullionDesk.com in London.

"But I still think we have some more weakness to come," he adds, explaining that large-scale speculative interest has made the market more susceptible to adverse events in the broader financial markets rather than just the activity on futures bourses.

Any significant selloffs in equities could spark another bout of bullion sales, he says.

Elsewhere, foreign-exchange dealers seemed to greet weaker-than-expected data on productivity and factory orders with a shrug, leaving the greenback mixed for the day. One dollar was recently buying 116.6 yen, up from 115.83 yen late Monday. One euro was buying $1.3114, compared with $1.3093 previously.

Back in gold, at least one technical analyst says traders are searching the charts for signs of direction, with the recent slide having broken the prior uptrend. Spot prices rallied from a January low of $608 to flirt with the $690 level in late February before selling off last week.

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