Credit: Investing.com - Investing.com - Gold futures pushed higher in post-Christmas Day trade on Wednesday, as the U.S. dollar came under pressure amid hopes U.S. lawmakers will reach a deal to avoid the looming fiscal cliff crisis ahead of the year-end deadline.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery traded at USD1,666.15 a troy ounce during U.S. morning trade, up 0.4% on the day.
Prices rose by as much as 0.55% earlier in the day to hit a session high of USD1,668.45 a troy ounce.
Market players remained focused on developments surrounding the fiscal cliff in the U.S., approximately USD600 billion in automatic tax hikes and spending cuts due to come into effect on January 1.
President Barack Obama, currently vacationing in Hawaii, plans to return to Washington on Thursday in order to take part in talks to avert the crisis ahead of the year-end deadline, the White House said late Tuesday.
Both chambers of Congress are also due to return to work on Thursday.
Without a deal, the U.S. could fall back into recession and drag much of the world down with it.
The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was down 0.3% to trade at 79.50.
Dollar weakness usually benefits gold, as it boosts the metal's appeal as an alternative asset and makes dollar-priced commodities cheaper for holders of other currencies.
Gold prices tumbled to a four-month low of USD1,636.45 a troy ounce late last week, as a bout of technical selling set in after prices broke below their 200-day moving average, triggering fresh sell orders amid bearish chart signals.
Despite losing nearly 4% in December, gold is still up almost 5.5% for the year. It is also set for a 12th straight year of gains, thanks to a rally in the first half of 2012 driven by ultra-low interest rates and aggressive monetary stimulus from global central banks.
Elsewhere on the Comex, silver for March delivery rose 0.9% to trade at USD30.16 a troy ounce, while copper for March delivery added 1.65% to trade at USD3.605 a pound.
Volumes were expected to remain light, with year-end positioning and profit-taking driving flows. Lower-than-usual volumes could spark volatile trading, resulting in rapid changes in metal prices during the final weeks of the year.
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