Gold Rises on Eurozone Positivity, Weaker Dollar

CHICAGO, Oct. 17 -- Gold futures on the COMEX division of the New York Mercantile Exchange rose on Tuesday, as increased positivity about the eurozone led to a drop in the U.S. dollar, which supported commodities trading.

The most active gold contract for December delivery rose 8.7 dollars, or 0.5 percent, to settle at 1,746.3 dollars per ounce.

After falling in two consecutive sessions, gold reversed its course on Tuesday and closed near the 1,750 dollars per ounce trading level.

Financial markets across the board were overwhelmingly positive during the Tuesday session, with the Dow Jones Industrial Average going up over 100 points, and crude oil also gaining.

Investors' confidence in a solution to Spain's financial problems strengthened, and the more positive eurozone outlook led to a rise in the euro at the expense of the dollar.

A lower dollar supports commodities such as gold, as it makes them less expensive to holders of other currencies.

Despite its gain from this session, the precious metal still remains sharply below its September highs, seen after the U.S. Federal Reserve announced a new round of quantitative easing. Though economic stimulus measures have given it some underlying support amid inflation fears, gold recently has been struggling to maintain its momentum.

Silver for December delivery rose 21.6 cents, or 0.66 percent, to close at 32.959 dollars per ounce.