Daily Gold Update

Source: Marketwatch

San Francisco— Gold futures were back at $1,600 an ounce on Tuesday, rebounding from a weak December with aplomb amid rallying oil futures and a weaker dollar. Gold for February delivery rose $35.80, or 2.2%, to trade at $1,602.70 an ounce on the Comex division of the New York Mercantile Exchange. It traded as high as $1,608.70 an ounce earlier. A close around these levels would be gold�s best since Dec. 23. Gold ended on the red for six straight sessions in late December, but ended higher Friday and gained 10% for the year. �A lot of (Tuesday�s gain) is a recovery from the end of the year,� said Jim Steel, a metals analyst with HSBC in New York. �You can�t discount� rallying prices for oil and a recover for the euro, which reflected on a weaker dollar, he added.

Geopolitical concerns surrounding Iran and potential for conflict in the Strait of Hormuz also brought some safe-haven demand for gold, Steel said. Some analysts remained optimistic about gold in 2012, in anticipation of a boost to the metal�s demand from quantitative-easing measures by the U.S. Federal Reserve and the European Central Bank. Merrill Lynch analysts said they expected gold prices to average $1,850 an ounce in 2012, representing a 17.6% increase over the 2011 spot price average. See full story.