Gold and silver prices both marched toward their largest gains in more than a week Tuesday joining the uplifting mood on Wall Street. As the Dow Jones Industrial Average reveled in a historic rally that took the benchmark to a record high, commodities also soared.
Gold prices settled Tuesday's trading session up $2.50, or 0.2%, at $1,574.90 an ounce, supported by stimulus chatter and a weaker dollar. The safe haven metal had reached as high as $1,585.80 an ounce intraday, on course for its biggest leap since Feb. 26.
Year-to-date, gold has dipped 5.7%. The commodity logged its fifth consecutive month of declines in February, marking its longest stretch of declines since 1997.
Silver prices rose 1.7% to $28.97 in early trading, their biggest gain in more than a week. The white metal ended the day at $28.81.
While silver's slip since January has been more modest than gold's, it's well below the $34.89 it traded at during the same period a year ago.
But loose monetary policies worldwide, geopolitical uncertainties, rising oil prices and renewed fears of inflation should support, if not boost, both gold and silver prices in the months ahead.
Aggressive Global Stimulus Here to Stay
Driving gold and silver prices higher Tuesday were comments from Federal Reserve Vice Chairman Janet Yellen.
At the National Association for Business Economics conference Monday, the Federal Open Market Committee's (FOMC) Yellen defended the bank's $85 billion a month of bond purchases.
"At this stage, I do not see any (risks) that would cause me to advocate a curtailment of our purchase program," Yellen said.
Yellen's sentiments mirror that of Fed Chief Ben Bernanke, who thinks continued stimulus will be good for the U.S. economy. Acknowledging there are risks from the Fed's aggressive efforts to stoke the anemic U.S. economy, Yellen added there are also risks from not being aggressive enough.
This news from overseas is also bullish for gold and silver prices…
Japanese Prime Minister Shinzo Abe has officially tapped Haruhiko Kuroda as the next head of the Bank of Japan. Kuroda pledged Monday to move aggressively to raise inflation to 2%.
"If I am approved as Bank of Japan governor, I believe it will be my most important duty to ensure the price stability goal (of 2% inflation) is reached as soon as possible," Kuroda said in a parliamentary confirmation hearing in his first public comments since being nominated.
Kuroda said the BOJ hasn't purchased enough assets and should buy longer term government bonds.
"Yellen's statement and pro-stimulus chatter in Japan are supporting gold. Also physical related demand has picked up," Bart Melek, the Toronto-based head of commodity strategy at TD Securities, told Bloomberg News.
According to a report Tuesday from Standard Bank Plc, gold buying remains robust throughout Southeast Asia.
Also propping up metals Tuesday was China's announcement of a fresh round of stimulus to keep its economy on an upward trajectory. Officials expect China's gross domestic product (GDP) growth in 2013 to come in at 7.5%, a bullish factor for gold and silver prices and markets overall.
India has also been bulking its gold stores. Worried about a mushrooming current account deficit, India moved to rein in its gold imports in late February by raising duties from 4 cents to 6 cents. As a result, Indian trades have rushed to buy more of the yellow metal, alarmed the government may make further moves to curtail soaring imports.
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Gold settles higher supported by a weaker dollar