CHICAGO, Feb. 26 (Xinhua) -- Gold futures on the COMEX division of the New York Mercantile Exchange rose sharply Tuesday on Bernanke's praise of QE benefits as well as on uncertainty of the election outcome in Italy.
The most active gold contract for April delivery gained 28.9 dollars, or 1.82 percent, to settle at 1,615.5 dollars per ounce.
This is the biggest one-day gain of gold prices in 2013 so far, and gold price settled at its highest level since Feb. 14.
In his semiannual testimony to the Senate Banking Committee Tuesday, Federal Reserve Chairman Ben Bernanke sent a strong signal that he supported the continuation of the 85-billion-dollar bond-buying program by saying that the benefits of quantitative easing are clear.
This triggered inflation worries among investors. Gold is often used as a hedge against inflation.
The uncertainty over the election outcome in Italy also boosted gold.
However, economic figures released Tuesday were not supportive to gold. The Conference Board said its consumer-confidence index rose to 69.6 in February, the highest level in three months and far exceeding analysts' estimates of 62.3.
Meanwhile, the U.S. Commerce Department announced that sales of new homes in the U.S. rose 15.6 percent in January to an annual rate of 437,000, the highest pace of activity since July 2008.
Nevertheless, the upbeat economic data only tarnished gold's safe-haven appeal for a short period of time.
Goldman Sachs was bearish on gold, and has cut its three-month, six-month and 12-month gold-price forecasts to 1,615 dollars an ounce from 1,825 dollars, to 1,600 dollars an ounce from 1,805 dollars and to 1,550 dollars an ounce from 1,800 dollars, respectively.
Silver for March delivery rose 27.3 cents, or 0.94 percent, to close at 29.26 dollars per ounce. Platinum for April delivery dropped 4.2 dollars, or 0.26 percent, to close at 1,616.5 dollars per ounce.