Investing.com - Gold and silver prices rallied to multi-month highs on Tuesday, as ongoing indications the Federal Reserve will keep interest rates at record-low levels for a considerable time continued to boost demand for the precious metals.
On the Comex division of the New York Mercantile Exchange, gold for August delivery rose to a session high of $1,326.40 a troy ounce, the most since April 15, before trimming gains to last trade at $1,324.20 during European morning hours, up 0.44%, or $5.80.
Gold ended Monday’s session up 0.14%, or $1.80, to settle at $1,318.40. Prices were likely to find support at $1,276.20, the low from June 19 and resistance at $1,331.40, the high from April 14.
Also on the Comex, silver for September delivery rallied 0.85%, or 17.8 cents, to trade at $21.14 a troy ounce, the highest level since March 18.
Gold and silver prices have been well-supported in recent sessions after Federal Reserve Chair Janet Yellen signaled last week that the central bank was in no hurry to raise interest rates.
Precious metals tend to benefit from low interest rates and looser monetary policy, which cuts the opportunity cost of holding non-yielding bullion.
Market players looked ahead to key U.S. data on consumer confidence, as well as a report on new home sales later in the day to gauge the strength of the economy.
The outlook for the U.S. recovery was boosted after data on Monday showed that manufacturing activity grew at the fastest rate in four years in June, while existing home sales rose more than expected in May.
Meanwhile, concerns about ongoing violence in Iraq lingered, as militants from the Islamic State of Iraq and the Levant seized control of key areas near the border with Jordan and Syria over the weekend.
Iraqi Prime Minister Nuri al-Maliki has agreed to a July 1 deadline to create a new government, a step required by Washington if Baghdad receives U.S. assistance in battling the insurgents.
Elsewhere in metals trading, copper for September delivery eased up 0.05%, or 0.2 cents, to trade at $3.144 a pound.