Gold prices rose on Tuesday to a near two-week high on weak Japan inflation data, but trading was thin with traders in the United States returning after the long Christmas weekend and London markets still closed.
Most analysts believe broad concerns about European banks and uncertainty around US President-elect Donald Trump’s policies will likely support gold prices in 2017. However, the price of gold could tumble over the near term if US bond yields continue to climb, they said.
Spot gold was up 0.39 percent at $1,137.98 an ounce by 10:27 a.m. EST (1527 GMT) after hitting its highest since Dec. 14 at $1,148 an ounce. US gold futures rose 0.5 percent to $1,139.10 per ounce.
Data showed Chinese industry racked up its strongest profit growth in three months in November, suggesting the world’s second-largest economy was improving. In Japan, however, core consumer prices fell in annual terms for the ninth month as household spending slumped.
“Maybe a top is in on Japan’s growth and with that you could start to see stimulus measures and that is why gold and silver ticked up,” said Phillip Streible, senior commodities broker for RJO Futures in Chicago.
“I think with gold, we can realistically get back up to $1,250 an ounce in 2017,” he said, adding that equity markets were possibly due for a correction.
Reference: Reuters
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