Dollar Decline Boosts Gold

Some investors purchase gold as a safe haven investment during times of war or geopolitical uncertainty.

"We are not sure what will happen in Iran, and [Tuesday evening] the President is giving a speech which could be incisive or devisive or both," says Jeff Christian, managing director at New York-based consulting company CPM Group. Anticipation about the State of the Union address has some market participants on edge, he says.

Underlying trading in the gold market was the roll-forward of Comex futures positions from the soon-to-expire February contracts to longer-dated instruments. Open interest in the current month now stands at 12.4 million ounces, compared to 8.5 million ounces for April-dated futures.

Market watchers expect front-month interest to dwindle over the next few sessions.

In the official sector, the ECB says it sold 37 million euros of gold and receivables last week, or about 2.4 tons.

Turning to the precious metals patch, RBC Capital Markets pruned its stock price target on shares of Newmont Mining(NEM Quote) to $52 a share from $64. That news didn't hamper the stock, which was up 2.3% at $44.04.

Elsewhere, Barrick Gold(ABX Quote) was ahead by 3.5%.

Meanwhile, in base metals, copper contracts added 5 cents to close at $2.58 a pound on the Comex.