PELABURJUTAWAN.COM – Gold futures struggled for direction in rangebound territory during late Asian trade on Monday, as activity was subdued with many investors in the region away for the Lunar New Year holiday.
Markets in China, Hong Kong and Singapore are closed due to Chinese Lunar New Year celebrations. Markets in Japan, Malaysia, South Korea, Taiwan and Vietnam are also closed for holidays.
Prices held in a tight range between USD1,666.95 a troy ounce, the daily low and a session high of USD1,670.25 a troy ounce.
Gold prices were likely to find support at USD1,653.35 a troy ounce, the low from January 28 and near-term resistance at USD1,685.65, February 5’s high.
Gold traders were looking ahead to a meeting of the eurogroup of euro zone finance ministers in Brussels later in the day, following last week’s European Union summit.
EU leaders reached an agreement on a seven year budget on Friday. European governments will contribute slightly less to this budget than they did for the previous seven year budget, following calls to curb spending by Brussels.
Investors were also monitoring political developments in the euro zone, amid uncertainty ahead of upcoming elections in Italy and renewed political tensions in Spain where the government has become embroiled in a corruption scandal.
A stronger U.S. dollar usually weighs on gold, as it dampens the metal’s appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies.
From a technical standpoint, gold faces strong resistance at the USD1,690-level. Market analysts have warned that a failure to break higher would signal a move back towards the USD1,650-level.