After Initial Volatility, Gold Moves Up For The Second Consecutive Day

Gold prices seesawed early today, but resumed their early jump to gains and continued to surge for a second consecutive day. Gold for June delivery was the most active contract as it climbed $1.80 to $1,195.80 an ounce on the New York Mercantile Exchange’s Comex division.

Analysts at Barclays Capital said, "Barring short-term price corrections in light of profit-taking and meeting margin requirements, we would expect gold prices to regain their upward momentum as safe haven buying remains robust and supports interest in the metal." The rally in the precious metal was triggered yesterday by a report indicating a drop in the US home prices during the month of March. Gold surged $17.90, or 1.5%, to close at $1,194 an ounce.

Analysts at Action Economics believed that although there is high volatility in gold during early trading hours, investors will resort to the safe haven when the market plunges in the wake of Europe’s debt crisis and the geopolitical risk, which has heightened after North Korea went on a military footing.

According to MF Global analysts, geopolitical tensions ‘in the Korean peninsula also have to be viewed with increasing alarm given how unpredictable and paranoid the North Koreans can be.’

By 11:40 am, the world's largest gold-backed exchange-traded fund GLD had moved up 0.34% to $117.25. Shares of AngloGold Ashanti Ltd (NYSE: AU) were trading 1.57% higher at $39.57 and Gold Fields Ltd (NYSE: GFI) had climbed 1.27% to $12.78.

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