Investing.com - Gold prices held flat to slightly higher inAsia on Monday with investors focused on weak inflation trends across the globe.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery were flat to slightly higher at%1,277.10 a a troy ounce.
Last week, gold rallied to the highest level in more than four months on Friday, as demand for safe haven assets was boosted amid turmoil in the currency market, following the Swiss National Bank's surprise policy decision to scrap its peg against the euro.
A day earlier, gold surged $30.30, or 2.45%, to close at $1,264.80 an ounce.
Also on the Comex, silver futures for March delivery soared fell to $17.678, down 0.41%.
Gold rallied sharply after the SNB shocked the markets on Thursday, saying it would discontinue the minimum exchange rate of 1.20 per euro it imposed in September 2011.
The central bank also cut interest rates deeper into negative territory, a move intended to dissuade investors from buying the franc.
Lower interest rates can give gold a lift, as it decreases the relative cost of holding on to the metal, which doesn't offer investors any similar guaranteed payout.
Meanwhile, mounting expectations that the European Central Bank will embark on full blown quantitative easing as soon as its next policy meeting on January 22 further supported the precious metal.
An interim ruling on Jan. 14, which is likely to be accepted by the European Court of Justice, said the ECB was free to pursue a bond purchasing program without legal challenge.
Expectations of monetary stimulus tend to benefit gold, as the metal is seen as a safe store of value and inflation hedge.
The diverging monetary policy stance between the Federal Reserve, which is poised to raise interest rates, and central banks in Europe and Japan has seen the dollar strengthen broadly in recent months.
In the week ahead, investors will be focusing on Thursday’s outcome of the ECB’s policy meeting and the subsequent press conference with central bank governor Mario Draghi.
Comex copper lost 0.70% to $2.613 a pound. Copper hit $2.423 a pound on Jan. 14, a level not seen since June 2009.
Copper traders are looking ahead to a raft of Chinese economic data later this week, including reports on fourth quarter gross domestic product, as well as data on industrial production and retail sales.
The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.