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Gold futures inch higher; BoJ, Eurogroup meeting eyed

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Investing.com - Gold futures inched higher during European morning hours on Monday, as market players looked ahead to a meeting of euro zone finance ministers later in the day, while awaiting the conclusion of Tuesday's Bank of Japan policy meeting.

Ongoing worries over the U.S. debt ceiling debate also remained in focus.

On the Comex division of the New York Mercantile Exchange, gold futures for February delivery traded at USD1,690.35 a troy ounce during European morning trade, up 0.2% on the day.

Prices held in a tight range between USD1,684.75 a troy ounce, the daily low and a session high of USD1,691.05 a troy ounce. Prices touched a four-week high of USD1,696.25 a troy ounce on January 17.

Gold prices were likely to find support at USD1,647.05 a troy ounce, the low from January 8 and near-term resistance at USD1,704.35,the high of December 18.

Trade was expected to remain subdued on Monday, as floor trading on the Comex was to remain closed for the Martin Luther King Jr. holiday.

Expectations for more aggressive stimulus measures by the Bank of Japan underpinned sentiment.

The BoJ was widely expected to implement more aggressive easing measures and adopt a 2% inflation target in response to growing political pressure from the government of Prime Minister Shinzo Abe to step up efforts to combat deflation.

Expectations of monetary stimulus tend to benefit gold, as the precious metal is seen as a safe store of value and a hedge against inflation.

Later in the day, the Eurogroup of euro zone finance ministers was to hold talks to discuss how the euro zone's permanent bailout fund, the European Stability Mechanism can provide direct aid to banks.

On Friday Jean-Claude Juncker, the outgoing chairman of the Eurogroup endorsed Dutch Finance Minister Jeroen Dijsselbloem as a "good" candidate to take over his job.

The appointment will be closely watched as the head of the Eurogroup plays a vital role forming a policy response to the debt crisis.

Gold traders continued to monitor political developments in the U.S., amid growing uncertainty over how the country will tackle the upcoming USD16.4 trillion debt ceiling debate.

U.S. Republicans said Friday they would hold a vote this week to grant a three-month debt limit extension to give Congress more time to pass a federal budget.

Failing to raise the debt ceiling by the end of February could lead to a first-ever U.S. default that could roil financial markets.

Elsewhere on the Comex, silver for March delivery eased up 0.15% to trade at USD31.97 a troy ounce, while copper for March delivery dipped 0.15% to trade at USD3.674 a pound.

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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.


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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