Daily Gold Update

Source: Marketwatch

San Francisco— Gold and silver futures surged Tuesday, rebounding from their recent slump as hopes rose for a resolution to the European debt crisis, stopping a rush to cash that had investors dumping precious metals. Gold for December delivery added $64.10, or 4%, to $1,658.90 an ounce on the Comex division of the New York Mercantile Exchange. Gold had earlier traded as high as $1,679.20 an ounce. December silver rallied $1.94, or 6.5%, to $31.93 an ounce, moderating earlier gains. The metal closed lower for the past three sessions, including an 18% loss on Friday. Global equity markets rose on Tuesday, buoyed by reports that euro-zone officials are planning to boost the region�s bailout fund in an attempt to bring the sovereign-debt crisis under control. U.S. stocks opened higher, and kept their advance.

�The rise in risk sentiment has also reduced the rush to generate cash, taking the pressure off the precious metals," said James Moore, an analyst at TheBullionDesk.com, in a note. However, gold �remains vulnerable to further bouts of liquidation,� he noted. The selloff last week broke the flight-to-quality flow for gold, and on Tuesday a new wave of buying emerged � from those who bought gold as a physical commodity and as a potential inflation barometer, said Adam Klopfenstein, a senior market strategist at MF Global in Chicago. �I�m bullish for gold long-term … I believe the lows have been made in the near term,� he said. In a selloff for equities, gold is likely to regain its safe-haven status and post gains, Klopfenstein added. See full story.