Gold steady near 6-week high as Chinese holiday demand supports

Investing.com - Gold prices were little changed near a six-week high on Tuesday, as ongoing indications of strong physical demand in China provided support.

Gold demand in China, the world's largest consumer, usually picks up ahead of the Lunar New Year holiday, which falls on January 31 this year.

On the Comex division of the New York Mercantile Exchange, gold futures for February delivery traded at USD1,251.50 a troy ounce during European morning trade, down 0.02%.

Gold prices held in a tight range between USD1,250.90 a troy ounce and USD1,255.50 a troy ounce.

The February contract rose to USD1,262.00 a troy ounce in electronic trade on Monday, the highest since December 11, before trimming gains to end at USD1,252.50.

Futures were likely to find support at USD1,237.30 a troy ounce, the low from January 17 and resistance at USD1,262.90, the high from December 11.

Comex floor trading was closed Monday for the Martin Luther King Jr. holiday, and transactions will be booked today for settlement purposes.

Data from the Commodities Futures Trading Commission released last Friday showed that hedge funds and money managers raised their bullish bets in gold futures to the highest level since November last week.

Net longs totaled 43,277 contracts in the week ending January 14, compared to 40,229 in the preceding week.

Meanwhile, silver for March delivery dropped 1% to trade at USD20.09 a troy ounce. The March contract traded in a range between USD20.08 a troy ounce and USD20.33 a troy ounce.

Elsewhere on the Comex, copper futures for March delivery fell 0.7% to trade at USD3.320 a pound.

Data on Monday showed that China’s economy expanded at an annual rate of 7.7% in the fourth quarter, down from 7.8% in the three months to September.

A separate report showed that industrial production in China rose by an annualized rate of 9.7% in December, compared to expectations for a 9.8% increase, after a 10% gain in the previous month.

The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.