Gold futures trade at 1-month high ahead of ECB, bond auctions

Forexpros - Gold futures edged higher on Thursday, trading at a one-month high as strong physical demand in Asia and the U.S. supported prices ahead of the European Central Bank's rate decision and a Spanish debt auction later in the day.On the Comex division of the New York Mercantile Exchange, gold futures for February delivery traded at USD1,647.05 a troy ounce during early European morning trade, gaining 0.45%. It earlier rose by as much as 0.55% to trade at USD1,649.05 a troy ounce, the highest since December 13. Gold futures were likely to find support at USD1,631.05 a troy ounce, the previous day's low and resistance at USD1,681.55, the high of December 13.Gold demand in China, the world's second largest consumer, continued to pick up ahead of the Lunar New Year, which falls on January 23. On Wednesday, official data showed that China's gold imports from Hong Kong surged to a record high 102,779 kilograms in November.Meanwhile, buyers in India, the world's biggest gold consumer, took advantage of a drop in local prices to stock up ahead of the wedding season beginning later this month.Adding to the positive sentiment on the precious metal, the U.S. Mint said Wednesday that it sold 79,000 ounces of gold coins so far in the first ten days of January, topping the total sales in December of 65,500 ounces.Markets were looking forward to the European Central Bank's policy meeting later Thursday. The ECB was expected to keep rates unchanged at 1% and to reiterate that governments in the euro zone must step up efforts to tackle the region's debt crisis.Investors also eyed government debt sales from Spain and Italy later in the day, in what was being viewed as a critical test of investor's appetite for euro zone sovereign debt.Spain was due to sell up to EUR5 billion of government bonds maturing in 2015 and 2016 a day before Italy's Treasury planned to auction EUR4.75 billion of five-year bonds.Bond auctions have become key drivers of risk sentiment in recent months, as traders attempt to gauge the ability of indebted euro zone nations to fund themselves.Elsewhere on the Comex, silver for March delivery rose 0.65% to trade at USD30.08 a troy ounce, while copper for March delivery advanced 0.6% to trade at USD3.567 a pound.The U.S. Mint said Wednesday that it sold 3.96 million ounces of American Eagle silver coins so far in January, more than the combined sales in the previous two months.
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