Gold prices get boost from soft dollar, St. Petersburg blast

rose Tuesday, continuing the decent gains seen in the first quarter.

The precious metal recorded gains of around 8 percent in the first quarter on renewed demand. This week, the precious metal is getting a boost from the softer dollar, as well as safe-haven demand following an explosion in St. Petersburg on Monday.

Melted gold flows out of a smelter
Arnd Wiegmann | Reuters

The Gold COMEX hit its highest intraday level in over a month at $1,263.7 earlier in Tuesday's session. This helped push up the VanEck Vectors gold miner exchange traded fund by 73 basis points.

Also, gold broke above its 200-day moving average of 1,261.5 for the first time since February 27.

Gold has struggled to break through important barriers such as this, according to Joni Teves, strategist at UBS.

"Gold's failure to break convincingly beyond key psychological and technical levels for now is likely acting as a challenge to sentiment, especially considering how reflation hopes and U.S. fiscal optimism recently came under some pressure," she said in a UBS note published Monday.

According to Teves, gold positioning increased by 4.33 million ounces in recent weeks, which offset a 60 percent decline in the first half of March. At 16.05 million ounces, long bets on gold are at their highest level in a month.

"Despite an underlying positive bias towards gold, the hesitation and lack of urgency to build positions at this point was evident in recent changes in Comex positioning," Teves added.

Gold may hit some obstacles ahead. Later this week, the focus is likely to be on U.S. employment data for March. A decent number may push the Federal Reserve towards raising interest rates, which would weigh on gold.

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