Bright day for precious metals

Gold prices advanced for a third session on Tuesday

Bullion prices ended higher at Comex on Tuesday, 06 January 2015. Gold prices advanced for a third session on Tuesday, helped by fresh demand for a safe haven in a new year that, so far, has been rough on stocks and other riskier assets.

Gold for February delivery rallied $15.40, or 1.3%, to settle at $1,219.40 an ounce.

March silver gained 42 cents, or 2.6%, to $16.64 an ounce.

The U.S. stock market, as tracked by the S&P 500 is down almost 3% in 2015 to date as investors worry about crude oil's crash and Greece's problems. February gold, meanwhile, is up 3%.

Most world stock markets saw follow-through selling pressure on Tuesday, following solid losses suffered on Monday. Worries about plunging crude oil prices leading to general price deflation and concerns about the financial, political and economic health of the European Union are the main factors producing a risk-off attitude in the market place so far this week. The risk aversion has hit the stock markets hard, but benefited the safe-haven markets, including gold, the U.S. dollar and U.S. Treasuries.

Crude oil prices fell to another 5.5-year low of $47.55 a barrel on Tuesday. Meantime, the U.S. dollar index is hovering near this week's 10-year high.

The Euro currency has this week dropped to a nine-year low against the greenback, mainly due to ideas the European Central Bank will act soon to stimulate European Union monetary policy. In overnight news, the EU got another dour economic report on Tuesday. The Markit composite purchasing managers index (PMI) came in at 51.4 in December from 51.1 in November. However, the December figure did not meet market expectations. A reading above 50.0 suggests expansion in the sector. The recent string of weaker EU economic data suggests the European Central Bank could act to stimulate its monetary policy at its next regular meeting on January 22.

There was a heavier slate of U.S. economic data released on Tuesday that included the U.S. services purchasing managers' index (PMI), the global services PMI, manufacturers' shipments and orders, and the ISM non-manufacturing report on business. That data was a mixed bag and had little impact on the markets.

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