Gold prices were higher on Tuesday, as investors shrugged off concerns the Federal Reserve might start tapering its bond-buying program at its upcoming policy meeting.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery traded at USD1,245.30 a troy ounce during European morning trade, up 0.9%. Comex gold prices rose to a session high of USD1,246.60 a troy ounce earlier, the strongest level since December 4.
The February contract settled 0.42% higher on Monday to end at USD1,234.20 a troy ounce.
Gold futures were likely to find near-term support at USD1,210.10 a troy ounce, the low from December 6 and resistance at USD1,251.50, the high from December 4.
Gold prices were boosted by a broadly weaker U.S. dollar, as dollar-priced commodities become cheaper to investors holding other currencies when the greenback weakens.
The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was down 0.1% to trade at 80.09, the lowest since October 31.
Federal Reserve officials gave fresh warnings about a potential stimulus reduction on Monday.
St. Louis Fed Bank President James Bullard said tapering will become increasingly likely as long as the labor market continues to improve, while Dallas President Richard Fisher said that rising long-term U.S. Treasury yields suggest that investors are expecting a reduction in stimulus.
The central bank is scheduled to meet December 17-18 to review the economy and assess monetary policy.
Gold is down approximately 26% this year, heading for the first annual loss in 13 years, as solid U.S. economic data underlined expectations the Fed will begin curbing stimulus.
Elsewhere on the Comex, silver for March delivery rallied 1.5% to trade at USD19.99 a troy ounce, while copper for March delivery was little changed to trade at USD3.259 a pound.
Data released earlier showed that Chinese industrial output rose less-than-forecast in November, while retail sales topped expectations.
Industrial production in China rose 10% last month, below expectations for a 10.1% increase, while retail sales jumped 13.7%, beating estimates for a 13.3% gain.
The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
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