Investing.com - Gold futures edged higher during European morning trade on Tuesday, after the Bank of Japan increased the size of its asset-purchase program, boosting the appeal of the precious metal.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,714.65 a troy ounce during European morning trade, up 0.35% on the day.
Prices held in a tight trading range of USD1,715.65 a troy ounce, the daily high and a session low of USD1,706.95 a troy ounce. Gold futures fell to a seven-week low of USD1,699.65 a troy ounce on October 24.
Gold prices were likely to find support at USD1,688.85 a troy ounce, the low from September 7 and resistance at USD1,731.25, the high from October 22.
Trading activity was expected to remain thin on Tuesday, as investors continued to monitor the trajectory of Hurricane Sandy, as it barrels along the U.S. East Coast.
Markets in the U.S. were set to remain closed for a second day on Tuesday due to disruption caused by the superstorm.
The Bank of Japan boosted the size of its asset-purchase program by JPY11 trillion, in an effort to boost slowing economic activity and to counter the strengthening yen, it announced earlier in the day.
The BoJ boosted the size of its asset purchase program by JPY11 trillion to a total of JPY66 trillion. The asset purchase fund has been its main policy tool since October 2010.
Policy makers kept a separate credit loan program at JPY25 trillion. The BoJ also left its policy interest-rate target unchanged in the current range of zero to 0.1%
Gold can benefit from such an environment of easy money because of expectations that ample liquidity would put a damper on the value of paper currencies.
Elsewhere, in the euro zone, sentiment firmed up after official data showed that the Spanish economy contracted by 0.3% in the third quarter, compared to expectations for a 0.4% contraction.
The data came a day after Spanish Prime Minister Mariano Rajoy said that he would request a bailout "when I think it is in the interests of Spain".
A bailout would allow the European Central Bank to step in and buy Spanish sovereign debt, which would result in reduced borrowing costs for the debt-strapped nation.
But Spain has been reluctant to do so because it may come with conditions on its budget.
Investors also remained jittery amid concerns over former Italian Prime Minister Silvio Berlusconi's threat to bring down the current government. Rome was planning to auction as much as EUR7 billion of government bonds later in the day.
Elsewhere on the Comex, silver for December delivery rose 1% to trade at USD32.06 a troy ounce, while copper for December delivery added 0.5% to trade at USD3.514 a pound.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,714.65 a troy ounce during European morning trade, up 0.35% on the day.
Prices held in a tight trading range of USD1,715.65 a troy ounce, the daily high and a session low of USD1,706.95 a troy ounce. Gold futures fell to a seven-week low of USD1,699.65 a troy ounce on October 24.
Gold prices were likely to find support at USD1,688.85 a troy ounce, the low from September 7 and resistance at USD1,731.25, the high from October 22.
Trading activity was expected to remain thin on Tuesday, as investors continued to monitor the trajectory of Hurricane Sandy, as it barrels along the U.S. East Coast.
Markets in the U.S. were set to remain closed for a second day on Tuesday due to disruption caused by the superstorm.
The Bank of Japan boosted the size of its asset-purchase program by JPY11 trillion, in an effort to boost slowing economic activity and to counter the strengthening yen, it announced earlier in the day.
The BoJ boosted the size of its asset purchase program by JPY11 trillion to a total of JPY66 trillion. The asset purchase fund has been its main policy tool since October 2010.
Policy makers kept a separate credit loan program at JPY25 trillion. The BoJ also left its policy interest-rate target unchanged in the current range of zero to 0.1%
Gold can benefit from such an environment of easy money because of expectations that ample liquidity would put a damper on the value of paper currencies.
Elsewhere, in the euro zone, sentiment firmed up after official data showed that the Spanish economy contracted by 0.3% in the third quarter, compared to expectations for a 0.4% contraction.
The data came a day after Spanish Prime Minister Mariano Rajoy said that he would request a bailout "when I think it is in the interests of Spain".
A bailout would allow the European Central Bank to step in and buy Spanish sovereign debt, which would result in reduced borrowing costs for the debt-strapped nation.
But Spain has been reluctant to do so because it may come with conditions on its budget.
Investors also remained jittery amid concerns over former Italian Prime Minister Silvio Berlusconi's threat to bring down the current government. Rome was planning to auction as much as EUR7 billion of government bonds later in the day.
Elsewhere on the Comex, silver for December delivery rose 1% to trade at USD32.06 a troy ounce, while copper for December delivery added 0.5% to trade at USD3.514 a pound.