NEW YORK ( TheStreet ) -- Gold prices popped higher Tuesday, shaking off a two day decline that left the metal down 2%. Gold for April delivery rose $23.50 to close at $1,748.40 an ounce at the Comex division of the New York Mercantile Exchange. The gold price has traded as high as $1,750.30 and as low as $1,712.60 an ounce while the spot price was adding $28, according to Kitco's gold index. Silver prices closed 44 cents higher at $34.19 an ounce while the U.S. dollar index was down 0.63% at $78.59.
During the week after the Fed announced it would keep rates low for longer, speculative long positions on the Comex increased by 24,000 contracts. On the one hand it means traders are starting to rebuild long positions and will continue to do so if prices hold up. However, those traders could also contribute to any selloff if they have tight sell stops -- which is a predetermined selling level initiated in order to protect profits - they could have dumped their positions over the last few trading days accelerating the recent selloff. These traders might add extra juice to gold as it finds direction. Gold took in stride the news that China only imported 38 tons of gold from Hong Kong in December, down 62% from November. This means that the country was not enticed by lower prices ahead of its New Year festival. On the flip side, China still wound up importing 427 tons of gold in 2011 and consuming 787 tons, which includes the 360 tons the country produced on its own. "Chinese gold imports from Hong Kong tripled from 2010," says Mark O'Byrne, executive director at GoldCore, a bullion dealer. "There continues to be suspicions of Chinese official sector gold bullion buying." Frank Holmes, U.S. Global Investors CEO and chief investment officer, also says not to make too big a deal over the headline number.