Gold, Silver At One-Week High on Easing China Concerns, Euro Rally

    --Comex June gold recently up 1% at $1,588.10/troy oz

    --Dollar retreat, Asian physical buying props up gold

    --Silver climbs 3%, eclipses gold's gains

       By Tatyana Shumsky and Matt Day 

    NEW YORK--Gold and silver futures jumped to a one-week high, following cues from a stronger euro and easing fears of tighter monetary policy in China.

    The most actively traded gold contract, for June delivery, was recently up $15.60, or 1%, at $1,588.10 a troy ounce on the Comex division of the New York Mercantile Exchange. The contract touched an intraday high of $1,589.00 a troy ounce, its highest traded price since $1,604.30 on April 2.

    Gold prices rallied alongside the euro. The common European currency was recently trading at $1.3100, its highest level in more than three weeks. Gold futures are traded in dollars, and become cheaper for investors who use other currencies to fund their purchases when the dollar eases.

    Gold prices also climbed amid easing fears that higher inflation would see Beijing tighten its purse strings in the coming months. Monthly data showed inflation increased at a slower than expected pace in March.

    "The reduced inflation in China is alleviating the concern that China would tighten its monetary policy," said Dave Meger, director of metals trading at futures brokerage Vision Financial Markets.

    China is the world's largest gold producer, and is second behind top buyer India in global consumption of the precious metal.

    Traders said gold also was supported on Tuesday by an increase in physical buying in Asia following public holidays that kept major consumer China out late last week.

    Silver futures also followed gold higher, also touching a one-week high.

    Silver for May delivery was recently trading up 81.7 cents, or 3%, at $27.955 a troy ounce.

    "Silver has a reputation for being the volatile sister to the gold market," Mr. Meger said.

    Gold and silver tend to move in the same direction as both are considered havens from currency volatility.

    --Francesca Freeman contributed to this article.

    Write to Matt Day at

    Write to Tatyana Shumsky at