Forexpros – Gold futures gained on Tuesday, as traders continued to monitor developments surrounding the euro zone’s debt crisis, with focus on a meeting between German Chancellor Angela Merkel and International Monetary Fund President Christine Lagarde later in the day.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery traded at USD1,620.65 a troy ounce during early European morning trade, gaining 0.78%.
It earlier rose by as much as 0.9% to trade at a session high USD1,623.85 a troy ounce.
Gold futures were likely to find support at USD1,597.75 a troy ounce, the low of January 5 and short-term resistance at USD1,632.15, the high of January 6.
Markets were looking forward to a meeting between German Chancellor Angela Merkel and IMF Chief Christine Lagarde later Tuesday in order to discuss Greece’s bailout package.
The meeting comes a day after Merkel met with French President Nicolas Sarkozy in Berlin. In a press conference following the talks, Merkel warned Greece that it would not be possible to give further financial aid without swift progress on its second rescue package, including a voluntary write-down on Greek debt held by private creditors.
Sentiment remained on the back foot amid concerns over rising borrowing costs in the euro zone, as markets looked ahead to government debt auctions by Spain and Italy later in the week.
Bond auctions have become key drivers of risk sentiment in recent months, as traders attempt to gauge the ability of indebted euro zone nations to fund themselves.
Markets were also jittery after a report on Tuesday showed that overnight deposits at the European Central Bank rose to EUR481.9 billion, hitting a fresh record for the third consecutive day, underscoring the unwillingness of European lenders to lend to each other.
The metal’s safe-haven appeal has diminished recently and has tended to trade in line with other risk-sensitive assets, with investors moving into the U.S. dollar amid the deepening debt crisis in Europe.
Wall Street investment bank Goldman Sachs remained bullish on the precious metal, saying in a report Monday that the recent drop in prices presents a “significant value opportunity” for investors.
Elsewhere on the Comex, silver for March delivery jumped 1.65% to trade at USD29.24 a troy ounce, while copper for March delivery rose 0.83% to trade at USD3.445 a pound.
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