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Gold futures hold gains after upbeat U.S. services report

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Shutterstock photo - Gold futures remained higher during U.S. morning trade on Tuesday, holding on to gains following a report showing service sector activity in the U.S. grew faster-than-expected in February.

On the Comex division of the New York Mercantile Exchange, gold futures for April delivery traded at USD1,580.30 a troy ounce during U.S. morning trade, up 0.55% on the day.

Prices rose by as much as 0.85% earlier in the day to hit a session high of USD1,585.60 a troy ounce.

Gold prices were likely to find support at USD1,564.20 a troy ounce, the low from March 1 and near-term resistance at USD1,602.20, the high from February 28.

Gold prices remained higher after the U.S. Institute of Supply Management said its non-manufacturing purchasing manager's index rose to 56.0 in February from a reading of 55.2 in January.

Analysts had expected the index to decline to 55.0 last month.

Sentiment on the precious metal remained underpinned amid ongoing expectations for further easing measures by a number of world central banks.

The European Central Bank, the Bank of England and the Bank of Japan all holding policy meetings later in the week.

Meanwhile, speculation the Federal Reserve will maintain its bond-buying program further boosted the appeal of the precious metal.

Fed Vice Chair Janet Yellen said on Monday the central bank's aggressive monetary stimulus was warranted given how far the economy was operating below its full potential.

Moves in the gold price this year have largely tracked shifting expectations as to whether the U.S. central bank would pump more money into the financial system.

Gold prices plunged to a seven-month low earlier in February after the minutes of the Fed's January meeting showed that policymakers discussed the slowing or stopping of USD85 billion in monthly bond purchases even before the job market improves.

Friday's data on U.S. nonfarm payrolls will also be closely watched as investors attempt to gauge the strength of the economic recovery.

Investors also continued to eye political developments in Italy, amid the growing likelihood of fresh elections as hopes for a coalition government faded.

Elsewhere on the Comex, silver for May delivery rallied 1.7% to trade at USD28.97 a troy ounce, while copper for May delivery jumped 1% to trade at USD3.535 a pound. - offers an extensive set of professional tools for the Forex, Commodities, Futures and the Stock Market including real-time data streaming, a comprehensive economic calendar, as well as financial news and technical & fundamental analysis by in-house experts.

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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.

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