Forexpros – Gold futures were higher during U.S. morning trade on Tuesday, as sentiment on the precious metal was boosted after data showed that Russia and Mexico added to their respective gold reserves last month, while investors looked forward to a meeting of Federal Reserve policy makers.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery traded at USD1,646.05 a troy ounce during early U.S. morning trade, jumping 0.85%.
It earlier rose by as much as 0.95% to trade at a two-day high of USD1,647.15 a troy ounce,
Gold futures were likely to find short-term support at USD1,613.55 a troy ounce, the low from April 4 and resistance at USD1,658.95, the high from April 16.
Sentiment on the yellow metal improved after data from the International Monetary Fund showed that Russia’s central bank purchased 16.5 tonnes of gold in March, taking its total holdings of the precious metal to 875.7 tons.
Mexico’s central bank raised its official holdings of gold by 16.8 metric tons valued at nearly USD906 million to bring its reserves to 122.6 tons.
The data also showed that Turkey added 11.5 tons, Kazakhstan 4.3 tons, Ukraine 1.2 tons, Tajikistan 0.4 ton, and Belarus 0.1 ton.
According to the World Gold Council, central banks were avid buyers of gold in 2011, with 439.7 tonnes’ worth of purchases, the highest level since the end of the gold standard in 1971, compared with a modest 77 tonnes in 2010.
Gold traders were looking ahead to a meeting of Federal Reserve policymakers on Tuesday and Wednesday to discuss the economy and monetary policy.
Traders are hoping there might be some show of support for a third round of bond purchases, dubbed quantitative easing III or QE3, to support the U.S. economy.
Expectations of monetary stimulus tend to benefit gold, as the metal is seen as a safe store of value and inflation hedge.
Meanwhile, market participants continued to monitor developments surrounding the euro zone’s ongoing debt crisis.
Risk sentiment found support after a successful auction of Dutch government debt earlier, but fears over the euro zone’s debt crisis lingered after Spain and Italy saw borrowing costs jump following government bond sales.
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.
Elsewhere on the Comex, silver for July delivery jumped 1.45% to trade at USD31.05 a troy ounce, while copper for July delivery rose 1.05% to trade at USD3.672 a pound.
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