Gold prices rose 1% Tuesday as a weaker dollar and weaker economic data lured investors back to the perceived safety of the yellow metal.
The most actively traded contract, for April delivery, was recently up $15.50, or 1%, at $1,593.50 a troy ounce on the Comex division of the New York Mercantile Exchange. The contract touched an intraday high of $1,597.00 a troy ounce, the highest-traded price since Feb. 28.
U.K. industrial production fell 1.2% in January from a month earlier, missing forecasts of a 0.1% increase.
The weaker-than-anticipated data was supportive of higher gold prices as it reinforced the ongoing need for loose monetary policies from the world's central banks, said traders at TD Securities. Low interest rates and a cash-flush financial system tend to draw investors looking to preserve their wealth into gold and other hard assets.
Gold futures have also benefited from investors who recently re-entered the market in search of a bargain. Some market participants believe that gold's retreat to seven-month lows was temporary, and saw this as an opportunity to buy the metal before prices resumed their upward march.
"There's very aggressive buying into dips," said Dave Meger, director of metals trading with Vision Financial Markets. "With the Fed stimulus still in place, the market feels the physical demand will pick up," he added.
A weaker dollar also supported gold prices. The greenback slipped against a trade weighted basket of currencies, with the ICE Dollar Index falling to 82.442, from 82.791 earlier.
Dollar-denominated gold futures appear cheaper to buyers using foreign currencies when the dollar weakens.