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Gold futures on track for yearly gain as fiscal cliff deadline nears

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Investing.com - Gold futures advanced during early U.S. morning trade on Monday, as markets continued to focus on U.S. "fiscal cliff" talks with just hours left before the year-end deadline hits.

On the Comex division of the New York Mercantile Exchange, gold futures for February delivery traded at USD1,661.55 a troy ounce during U.S. morning trade, up 0.35% on the day.

Prices rose by as much as 0.8% earlier in the session to hit a daily high of USD1,669.25 a troy ounce.

Gold prices were likely to find support at USD1,636.45 a troy ounce, the low from December 21 and resistance at USD1,672.75, the high from December 20.

Trading was expected to remain subdued, with year-end positioning driving flows and as holidays in many countries limit activity.

Comex floor trading will remain closed on Tuesday for New Year's Day.

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.

U.S. President Barack Obama met with congressional leaders at the White House Friday afternoon, but both sides failed to reach an agreement ahead of the looming year-end deadline.

Senate Majority Leader Harry Reid said the Senate would resume sitting on Monday to continue discussions, but there were still significant differences between the two sides.

Without a deal, the U.S. could fall back into recession and drag much of the world down with it.

For the year, New York-traded gold futures rose nearly 5.5%, its twelfth consecutive year of gains, thanks to a rally in the first half of the year driven by ultra-low interest rates and aggressive monetary stimulus from global central banks.

Gold futures rallied to an 11-month high of USD1,798.05 a troy ounce on October 5, boosted by ongoing expectations policymakers around the world will launch more stimulus to support the weak global economy.

Elsewhere on the Comex, silver for March delivery rose 0.3% to trade at USD30.07 a troy ounce, while copper for March delivery added 0.45% to trade at USD3.605 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.

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