Gold rallies as US dollar eases

Gold futures on the COMEX division of the New York Mercantile Exchange rose Tuesday as the U.S. dollar eased.

The most active gold contract for December delivery went up 3.6 U.S. dollars, or 1.15 percent, to settle at 1,197.1 dollars per ounce.

Analysts said that the dollar's fall against major currencies resulted in gold prices moving higher Tuesday.

The U.S. dollar fell against the Japanese yen after Prime Minister Shinzo Abe announced Tuesday an unexpected election and a delayed tax increase in reaction to the poor economic data in Japan. This triggered a move to gold as a safe haven.

The euro rose as a Zew survey showed improvement in economic confidence in Germany.

Additionally, crude prices retreated Tuesday as traders thought global crude supplies surpassed demand. In U.S. data, the Producer Price Index for final demand rose 0.2 percent in October, seasonally adjusted, the U.S. Bureau of Labor Statistics said Tuesday. Analysts said it was slightly more than expected, but it did not have an effect on the gold market.

Silver for December delivery gained 11.7 cents, or 0.73 percent, to close at 16.174 dollars per ounce. Platinum for January delivery gained 3.3 dollars, or 0.27 percent, to close at 1,204.6 dollars per ounce.