Gold Rises 1 Percent on Technical Buying, Euro Gains
Reuters
Gold rose 1 percent on Monday to a six-week high, boosted by technical buying and as the euro rallied ahead of the outcome of a euro zonemeeting on Greek debt restructuring.
Gold option volatility also spiked ahead of an expiration later this week. The metal broke above $1,669 an ounce, a key resistance level on technical charts, and approached the $1,700 an ounce level for the first time in a month.
A slumping dollar boosted bullion and crude oil, as Germany and Francepressed for a rapid deal between Greece and its private creditors to cut its soaring debt and avert default.
"Gold is reaching another technical area. An above $1,675 close tonight could mean additional buying this week ahead of option expiration and as traders await the euro zone news," said George Gero, vice president of RBC Capital Markets.
Spot gold was up 1.1 percent at $1,676.76 an ounce by 2:30 p.m. EST. Its session high of $1,681.16 was the highest price since December 12.
Gold has fallen only twice in the past 10 sessions and has risen 7 percent in January.
U.S. gold futures for February delivery settled up $14.30 an ounce at $1,678.30 in the COMEX division of NYMEX. Trading volume was in line with its 30-day average.
Volumes were light elsewhere as markets closed in China - one of the world's top gold consumers and in other key Asian markets for the Lunar New Year break.
On charts, gold rose above technical resistance at $1,669 an ounce based on a downward trendline connecting its all-time high and recent peaks, said Rick Bensignor, chief market strategist at Merlin Securities.
Bensignor said staying above that resistance should bring in short covering and new buyers who believe the correction is over.
Gold's next resistance lies at its 100-day moving average at $1,688 an ounce, analysts said.
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