The Bullion Desk: Gold surges to highest since October, silver breaks through $17

Source: The Bullion Desk

The gold price surged on Tuesday afternoon, bolstered by routs in global equities and a weaker dollar.

Spot gold was last $32 higher at $1,234.30/1,235.10 per ounce, bouncing strongly off an intraday low of $1,199.40.

“Gold has gained upside momentum today on increased market speculation for more severe slowdowns in Europe and China, weak equity markets and reduced dollar strength following data pointing to reduced consumer confidence and future consumption,” FastMarkets analyst Tom Moore said.

Gold has been supported by a rush in safe-haven buying, with the dollar slipping to 1.2430 against the euro from two-year highs on Monday around 1.22, forcing all three major US equity indices around one percent lower.

Risk appetite appears to have been dampened by news that the Greek government has brought forward a presidential vote to next week, leading to concerns that radical leftist party Syriza could win a relative majority, which would have deep-lying implications for creditors and banks.

Oil prices are also playing on sentiment, exacerbating concerns over the effect of lower prices on the world economy. Brent crude is trading just above a five-year low of $66.90 per barrel.

European stocks have also suffered – the euro STOXX is down 2.19 percent, the CAC 40 2.2 percent and the DAX 1.83 percent.

In the other metals, silver followed gold higher, breaking through resistance at $17 – it was last at $17.08/17.13 per ounce, up 76 cents and at its highest since October 30.

Platinum at $1,246/1,251 per ounce was up $20, after reaching an October high of $1,253, while palladium at $803/809 was $9 higher.