Investing.com - Gold futures rose to the highest level in two weeks on Wednesday, the first trading session of the new year, as U.S. lawmakers approved a deal to avoid the fiscal cliff crisis.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery traded at USD1,682.95 a troy ounce during European morning trade, up 0.45% on the day.
Prices rose by as much as 0.6% earlier in the session to hit a daily high of USD1,685.15 a troy ounce, the strongest level since December 18.
Gold prices were likely to find support at USD1,652.75 a troy ounce, the low from December 24 and resistance at USD1,704.35, the high from December 18.
The U.S. House of Representatives voted Tuesday night in favor of a deal to avert the fiscal cliff, approximately USD600 billion in automatic tax hikes and spending cuts which came into effect on January 1.
The final vote tally was 257 to 167. The passage came after the Senate approved the measure by a large majority of 89-8 early Tuesday morning.
The bill now heads to the White House, where President Barack Obama is expected to sign it into law.
Weakness in the U.S. dollar provided support to gold's strength. 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 79.87.
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.
Elsewhere on the Comex, silver for March delivery rose 1.6% to trade at USD30.71 a troy ounce, while copper for March delivery added 0.9% to trade at USD3.685 a pound.
Copper prices found additional support after official data Tuesday showed that China's manufacturing Purchasing Managers' Index expanded for the third consecutive month in December.
The PMI held steady at 50.6 last month, above the 50.0-point mark that indicates an improvement in activity.
Metal traders are now looking ahead to Friday's highly-anticipated data on U.S. nonfarm payrolls, as investors attempt to gauge the strength of the country's economic recovery.
Any improvement in the U.S. economy could scale back expectations for further easing from the Federal Reserve.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.