Investing.com - Gold prices rose on Monday after investors snapped up long positions in the precious metal on market talk that the Federal Reserve will make no changes to its stimulus polices in the near future.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery were up 0.52% at USD1,669.25 a troy ounce in U.S. trading, up from a session low of USD1,659.85 and down from a high of USD1,674.55 a troy ounce.
Gold futures were likely to test support USD1,653.55 a troy ounce, Friday's low, and resistance at USD1,678.75, Thursday's high.
Federal Reserve Chairman Ben Bernanke is due to speak in public later on Monday and hopefully clear up doubts surrounding when the U.S. central bank will consider winding down a USD85 billion monthly bond-buying program, which weakens the dollar as a side effect.
Gold and the dollar trade inversely from one another.
Minutes from the Federal Reserve's December meeting and comments made by senior monetary authorities seem to suggest Fed governors are spending more time discussing when to consider winding down stimulus measures.
Winding down stimulus would allow the dollar to strengthen and gold to lose its appeal as an inflationary hedge.
Gold prices rose on Monday, however, as investors concluded that even though stimulus programs will expire one day, that day is likely far off, as the Fed itself has said that the U.S. unemployment rate will need to drop to around 6.5%, well beyond their current 7.7% levels before major policy changes take place.
Meanwhile on the Comex, silver for March delivery was up 2.43% and trading at USD31.148 a troy ounce, while copper for March delivery was down 0.37% and trading at USD3.640 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.