Updated from 10:36 a.m. ET with settlement prices and comments from a precious metals analyst
NEW YORK (
pared early Tuesday gains as record all-time highs for the
Dow Jones Industrial Average grabbed investors from the yellow metal into equities.
Gold for April delivery added $2.50 to settle at $1,574.90 an ounce at the Comex division of the New York Mercantile Exchange.
traded as high as $1,585.80 and as low as $1,571.10 an ounce, while the spot price was increasing $2.20, according to Kitco's gold index.
"The paring of gold gains today was caused by the headwinds of a strong stock market as funds rushed to better performing assets," George Gero, precious metals strategist at RBC Wealth Management, said in a note on Tuesday afternoon.
for May delivery ticked higher by 11 cents to close at $28.60 an ounce, while the
U.S. dollar index
was falling 0.07% to $82.10.
Gold posted wider gains in the morning as the
Dow Jones Industrial Average
breached its previous all-time high
of 14,164.53 points, set Oct. 9, 2007. The precious metal came off its intraday highs as equities showed few signs of a pullback.
The Chinese government announced overnight it would implement a new stimulus initiative to bolster the economy there. The country reiterated a growth target of 7.5% for the year.
Fresh buyers from Asia and a weaker U.S. dollar had boosted gold prices to session highs during morning trading.
"This morning's rally was basically due to a little weakness in the dollar, and of course China,"
Gero said in an interview.
"First of all, China is looking at 7.5% growth, China is possibly going to approve a gold ETF, and then, so, we had some Far East buying."
The Institute for Supply Management reported that its non-manufacturing business activity index registered at 56, which beat by a point the consensus among economists.
Gold mining stocks were mixed on Tuesday. Shares of
(GOLD - Get Report)
were adding 1.2%, but shares of
(AEM - Get Report)
were shedding 1.2%.
Among volume leaders,
(AUY - Get Report)
was off 0.47%.
SPDR Gold Trust
was gaining 0.17%, while
iShares Gold Trust
was tacking on 0.07%.
-- Written by Joe Deaux in New York.