Investing.com - Gold and silver prices rallied to three-week highs on Tuesday, as a broadly weaker U.S. dollar and some technical buying boosted prices.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery traded at USD1,258.20 a troy ounce during U.S. morning trade, up 1.95%. Comex gold prices rose to a session high of USD1,263.40 a troy ounce earlier, the strongest level since November 20.
The February contract settled 0.42% higher on Monday to end at USD1,234.20 a troy ounce.
Gold futures were likely to find near-term support at USD1,224.80 a troy ounce, the low from December 9 and resistance at USD1,275.70, the high from November 20.
Meanwhile, silver for March delivery surged 2.95% to trade at USD20.28 a troy ounce, the highest since November 20.
The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was down 0.15% to trade at 80.04, the lowest since October 31.
Dollar weakness usually benefits precious metal, such as gold and silver, as it boosts the metal's appeal as an alternative asset and makes dollar-priced commodities cheaper for holders of other currencies.
Investors appeared to shrug off concerns the Federal Reserve might start tapering its bond-buying program at its upcoming policy meeting.
St. Louis Fed Bank President James Bullard said Monday tapering will become increasingly likely as long as the labor market continues to improve, while Dallas President Richard Fisher said that rising long-term U.S. Treasury yields suggest that investors are expecting a reduction in stimulus.
The central bank is scheduled to meet December 17-18 to review the economy and assess monetary policy.
Gold is down approximately 25% this year, while silver declined 34%, as solid U.S. economic data underlined expectations the Fed will begin curbing stimulus.
Elsewhere on the Comex, copper for March delivery inched up 0.45% to trade at USD3.272 a pound, the highest since November 4.
Data released earlier showed that industrial production in China rose 10% last month, in line with expectations for a 10.1% increase, while retail sales jumped 13.7%, beating estimates for a 13.3% gain.
The Asian nation is the world's largest copper consumer, accounting for almost 40% of world consumption last year.
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