Investing.com - Gold prices rose on Monday after Chinese inflation figures came in less than expected and sparked talk Beijing has room to further loosen monetary policy if needed.
Hopes that first-quarter earnings in the U.S. will meet expectations enticed investors out of the safe-haven greenback and into equities, which gave gold even more room to rise.
Gold and the U.S. dollar tend to trade inversely from one another.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery were up 0.89% at USD1,586.55 a troy ounce in U.S. trading on Tuesday, up from a session low of USD1,570.15 and down from a high of USD1,590.05 a troy ounce.
Gold futures were likely to test support USD1,567.15 a troy ounce, Monday's low, and resistance at USD1,604.25, last Tuesday's high.
China reported earlier that its year-on-year consumer inflation rate grew 2.1% in March, slower than February's 3.2% inflation rate.
Analysts were expecting 2.4% inflation, and the softer-than-expected figure sent gold rising due to talk China may consider loosening monetary policy to fuel more growth.
Loose monetary policies often debase paper currencies, which makes gold an attractive hedge.
Elsewhere, U.S. metals giant Alcoa reported on Monday after the closing bell that it earned during the first quarter of 2013 USD0.11 per share, beating expectations of USD0.08 per share.
Revenue came in at USD5.83 billion, below expectations of USD5.88 billion.
Alcoa's earnings kick off the quarterly reporting season and cautious hopes for modest gains in profits sent stocks rising and the dollar dipping, a recipe for rising gold prices.
Elsewhere on the Comex, silver for May delivery was up 2.82% at USD27.903 a troy ounce, while copper for May delivery was up 2.09% and trading at USD3.442 a pound.
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