Gold jumps to 2-week high on weak dollar

Gold prices surged during the European session on Tuesday, to resume gains after a pause yesterday, as the US dollar fell against a basket of currencies, in addition to strong safe-haven demand after a sharp drop in global stock markets.

Gold prices rose by 0.6% to $1,470.84 an ounce (highest since Nov.22), after opening at $1,462.17, with a session-high of $1,459.81.

The yellow metal fell by 0.1% yesterday, its first daily loss in 3 days as its recovery attempts from the 2-week low hit a pause.

The US dollar fell by 0.1% against its rivals on Tuesday, to deepen its losses for the fourth straight day, and hit a 2-week low o 97.75, reflecting its drop against a basket of currencies.

This drop in US dollar is due to weak US manufacturing data that was released yesterday, as it posted the fourth straight monthly contraction in November, and the slowest pace since June 2009, which boosted the odds for a fourth US rate cut this year.

Beside the US dollar drop, gold prices drew support from strong safe-haven demand, amid investors' risk-aversion as most global stock markets slumped due to uncertainty over the US-China trade talks.