Gold trades near 4-month high; ECB meeting eyed

Investing.com - Gold traded near a four-month high on Monday, as investors looked ahead to Thursday's meeting of the European Central Bank, amid speculation it will launch a government bond-buying program.

On the Comex division of the New York Mercantile Exchange, gold futures for February delivery dipped $1.30, or 0.1%, to trade at $1,275.60 a troy ounce during European morning hours.

Prices held in a tight range between $1,274.90 and $1,281.90. Trade volumes were expected to remain light on Monday, with U.S. markets closed for a holiday.

On Friday, gold hit $1,282.40, the most since September 2, before settling at $1,276.90, up $12.10, or 0.96%.

Futures were likely to find support at $1,255.20, the low from January 16, and resistance at $1,290.90, the high from September 2.

Also on the Comex, silver futures for March delivery shed 7.2 cents, or 0.41%, to trade at $17.67 a troy ounce.

The euro was close to recent lows against the dollar and the yen on Monday as investors waited to see if the European Central Bank would embark on an outright quantitative easing program on Thursday.

Last Thursday, the Swiss National Bank abandoned its three-year old 1.20 per euro exchange rate cap in a shock move, signaling that it expects the ECB to act this week.

The move roiled financial markets and saw the Swiss franc strengthen across the board.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, dipped 0.35% to 92.72.

Elsewhere in metals trading, copper for March delivery declined 1.1 cents, or 0.42%, to trade at $2.607 a pound.

Market participants looked ahead to a raft of Chinese economic data due on Tuesday for further indications on the strength of the economy and the future path of monetary policy.

The Asian nation will release data on fourth quarter gross domestic product, as well as reports on industrial production, retail sales and fixed-asset investment for December.

Market analysts expect China's economy to grow 7.2% in the three months ending December 31, down from growth of 7.3% in the preceding quarter.

Recent economic data from the Asian nation has indicated that the recovery remains fragile and may require further monetary stimulus.

China is the world’s largest copper consumer, accounting for almost 40% of world consumption.