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Updated from 12:11 p.m. with settlement prices and comments from Bundesbank press release
NEW YORK (
Gold prices rose Tuesday after the German central bank said only some of the confidence lost since the European sovereign debt crisis has been recovered.
Gold for April delivery jumped $13.70 to settle at $1,591.70 an ounce at the Comex division of the New York Mercantile Exchange. The
gold price traded as high as $1,597.60 and as low as $1,578.80 an ounce, while the spot price was gaining $12, according to Kitco's gold index.
"They said that Europe was starting to have more problems, and that's why the market is starting to work its way back up," said Phil Streible, senior commodities broker at RJO Futures.
Streible also said gold options hit a lot of stops over $1,586 an ounce.
Silver prices for May delivery added 32 cents to close at $29.17 an ounce, while the
U.S. dollar index was dipping 0.06% to $82.57.
"Only some of the confidence lost as a result of the crisis has been recovered so far," Bundesbank President Jens Weidmann said in a press release.
Investors often view gold as a safe haven asset hedge against economic uncertainties and the yellow metal consistently has attracted buyers on the eurozone's troubles stemming from the global financial crisis and subsequent European sovereign debt crisis.
A recent rally in U.S. stocks has weighed down on the precious metals for more than a week as investors moved investments into equity assets for higher returns,
but Tuesday saw stocks move modestly lower. The dip in equities was also taking some of the pressure off gold prices.
While the euro was retreating slightly against the U.S. dollar on Tuesday, the Japanese yen made progress against the greenback.
The dollar was slipping to 96.06 yen from the prior day's settle at 96.29 yen. Investors continue to await Haruhiko Kuroda to take the helm as the Bank of Japan governor.
Prime Minister Shinzo Abe's government nominated Kuroda as the majority party hopes the nominee will steer the central bank toward looser monetary policy.
"The Bank of Japan's action. I still think that's the biggest catalyst [for gold] of all, because I think it's such a dire situation, at least in the view of the monetary authorities over in Japan," said Anthem Blanchard, chief executive of Blanchard Vault.
Gold mining stocks were mostly higher on Tuesday. Shares of
NovaGold Resources(NG) were rising 5.1% and shares of
Eldorado Gold(EGO - Get Report) were up 3.3%.
Among volume leaders,
Barrick Gold(ABX - Get Report) was increasing 1.1%.
SPDR Gold Trust(GLD) was tacking on 0.82%, while
iShares Gold Trust(IAU) was increasing 0.78%.
-- Written by Joe Deaux in New York.