December delivery gold climbed $7.70 to end at $474.70 an ounce at the COMEX division of the New York Mercantile Exchange, its highest close since October 17, after trading $466.30 to $475.80.
The market came to life at the New York opening, after having edged higher in European trade, on a rush of investment fund buying that shoved gold back above the $470 level following the recent sell-off that sent it down toward $462.
"Strong European and weaker US confidence data has prompted a steady fall by the dollar today, triggering a return of bullish sentiment to the precious complex with all the metals posting good gains," said James Moore, analyst at TheBullionDesk.com.
The dollar eased to the low-end of a recent trading range with the euro after weaker than expected US consumer confidence data hinted that recent hurricanes and soaring energy prices could slow the economy's momentum and the pace of interest rate rises.
"Certainly this is fund buying...and I think it's all triggered by the euro rising," said Leonard Kaplan, president of Prospector Asset Management in Evanston, Illinois.
Dollar-denominated gold tends to climb with a weaker US currency because the metal gets cheaper for those holding foreign currencies.
Gold also got a boost as oil rose to $62 a barrel, while US stocks eased. Higher crude supports gold because investors often use the metal as a hedge against inflation.
Uncertainty among investors also has propped up gold prices because hard assets like the precious metals are gaining interest, traders said.
The US Conference Board said the consumer confidence index was down at 85.0 in October from 87.5 in September
Spot gold likewise rallied Tuesday. Bullion jumped to $472.20/473.00 an ounce late in New York from the prior closing quote at $465.00/5.70. Tuesday's afternoon fix in London by bullion dealers was at $472.25.
New gold trading set to launch in Dubai, long a hub for the physical gold industry in the Middle East, India and Pakistan, also was seen generating fresh interest in the market.
Dubai, a trading port in the United Arab Emirates, said Tuesday it would launch a gold futures exchange on November 22 with South Africa's Standard Bank among 50 founding members.
The Dubai Gold and Commodities Exchange said members would be able to trade six forward-month gold futures. Gold and silver options contracts would be launched in the first quarter of next year.
Dealers pegged resistance in COMEX December gold at $483.10 and, higher up, at the psychological $500 level, with support seen as $465 and then at $457.
Estimated COMEX volume was a busy 57,000 lots by 1 pm, versus Monday's final tally of 45,969 lots. Open interest in COMEX gold rose 303 contracts to 335,816 lots.
December silver rose 11.7 cents to finish at $7.825 an ounce, trading from $7.685 to $7.87. Traders said prices were targeting 10-month highs atop $8.
Spot silver was last quoted at $7.78/81 an ounce versus Monday's close at $7.64/67. It fixed at $7.72.
NYMEX January platinum gained $12.80 to end at $945.60 an ounce. Spot platinum reached $936/939.
December palladium jumped to an 11-month high and settled up $7.75 at $221.55 an ounce. Spot hit $213/217 in late trade.