Gold futures inch higher to hit 6-week top in holiday-thinned trade

Investing.com - Gold prices inched higher to hit the strongest level in six weeks on Monday, but trade was expected to remain subdued as floor trading on the Comex was to remain closed for the Martin Luther King Jr. holiday.

On the Comex division of the New York Mercantile Exchange, gold futures for February delivery traded at USD1,254.40 a troy ounce during European morning trade, up 0.2%.

Gold prices rose to a session high of USD1,261.30 a troy ounce earlier in the day, the strongest level since December 11.

The February contract settled up 0.94% on Friday to end at USD1,251.90 a troy ounce. Futures were likely to find support at USD1,237.30 a troy ounce, the low from January 17 and resistance at USD1,262.90, the high from December 11.

Gold prices have been well-supported in recent sessions amid indications of strong physical demand in Asia. Gold demand in China, the world's largest consumer, continued to pick up ahead of the Lunar New Year, which falls on January 31.

Meanwhile, the CFTC Commitments of Traders report for the week ending January 14 released Friday showed that hedge funds and money managers increased their bullish bets in gold futures.

Gross long gold positions rose by 5,066 contracts to 114,002, while gross short positions increased by 2,018 lots to 70,725. Net longs totaled 43,277 contracts, compared to 40,229 in the preceding week.

Meanwhile, silver for March delivery was little changed to trade at USD20.30 a troy ounce. The March contract held in a tight range between USD20.27 a troy ounce and USD20.42 a troy ounce.

Elsewhere on the Comex, copper futures for March delivery fell 0.2% to trade at USD3.339 a pound after official data showed that China’s economy expanded at an annual rate of 7.7% in the fourth quarter, down from 7.8% in the three months to September.

A separate report showed that industrial production in China rose by an annualized rate of 9.7% in December, compared to expectations for a 9.8% increase, after a 10% gain in the previous month.

The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.