Gold for February delivery at the COMEX division of the New York Mercantile Exchange was popping $30.60 to $1,264.80 an ounce. The gold price traded as high as $1,267.50 and as low as $1,237.40 an ounce, while the spot price was adding $25.93.
"The market continues to bounce higher from the oversold positions of last week -- a week to the day we suggested that the market was well ahead of itself and taking a position," Peter Hug, global trading director at Kitco Metals, wrote Tuesday in a note to investors.
Tuesday's price move is similar to the surge gold posted Dec. 4 as a short-covering rally boosted the price by about $26 that day. Gold plummeted the following day as market participants shorted the market.
"The market is aggressively short, but the gold market has not confirmed a breakout," Hug wrote in Tuesday's note.
Gold mining stocks were mostly higher on Tuesday, in line with gold futures. AngloGold Ashanti (AU) was one of the top gainers in the space, soaring 7.3% to $13.03 a share. Barrick Gold (ABX) was gaining 5.9% to $16.94