Gold prices gained during Asian trading hours on Tuesday as demand for inflation-hedge bets increased somewhat thanks to Bank of Japan’s approval of huge economic stimulating package; nevertheless, the metal is still struggling to breach the psychological $1,700 an ounce mark despite of some pick up in physical demand from Asia. Silver prices also edged higher in early trading on Tuesday.
At last check, gold futures for February delivery edged up 0.31% to $1,692.30 an ounce and spot gold inched up 0.13% to $1,691.69 an ounce.
Meanwhile in Japan, Tokyo gold climbed to a record high on Tuesday after the Bank of Japan (BOJ), in line with expectations, agreed with newly elected Prime Minister Shinzo Abe’s call for unprecedented economic stimulating measures and raising the inflation target at 2% from earlier 1.%.
Tokyo benchmark gold futures hit a historic high of 4,913 Yen an ounce, according to a data provided by the Thomson Reuters.
Just few days ago, Abe announced $117 billion worth economic stimulating package as the country reels under economic stagnation.
The approval from BOJ weighed on the yen initially; however, it recovered it lost ground and gained vis-à-vis the U.S. dollar later during the day.
However, investors are shying away from the bullion market as the metal has been consistently failing to breach the $1,700 an ounce mark.
“Gold really needs to break above $1,700 and close above that level to attract short-term buyers, but the momentum has not built up that much, even when we are right before the Lunar New Year and physical demand is steady,” said Peter Tse, director at ScotiaMocatta , according to Thomson Reuters.
Wang Tao, a market analyst at Reuters believe that spot gold will need to stay steady over the resistance level of $1,694 an ounce if it has to touch the next key resistance of $1,706 an ounce.
Silver futures were last up 0.06% to $$31.95 an ounce.
In pre-market trading, the iShares Silver Trust (ETF) (NYSE: SLV
) was up 0.26%, and the ProShares Ultra Silver (ETF) (NYSE: AGQ
) was up 0.46%.