Gold begins 2018 on a firmer note on strong technicals

Gold prices hit over 3-month highs on Tuesday, supported by technical factors after the precious metal broke through strong resistance last week.

Spot gold rose 0.2 percent to $1,305 an ounce at 0114 GMT, having hit its highest since Sept. 26 at $1,307.63 earlier in the session.

Gold benefited from technically driven momentum after closing above its 100-day moving average last week and breaching strong resistance at $1,300 on Friday.

U.S. gold futures inched down 0.2 percent to $1,307.20 an ounce.

Spot gold rose 13 percent last year to mark its best year since 2010.

Gold’s gains coincide with the greenback, in which gold is priced, sliding toward its worst year since 2003 last week, damaged by tensions over North Korea, the Russian scandal surrounding U.S. President Donald Trump’s election campaign, and persistently low U.S. inflation.

The dollar remained out of favor having hit a three-month low against a basket of its peers on Friday. That brought its losses for 2017 to 9.8 percent, its worse performance since 2003.

U.S. Mint sales of American Eagle gold and silver coins dropped to their lowest in 10 years in 2017, U.S. Mint data showed on Friday.

Hedge funds and money managers raised their net long position in COMEX gold for the second straight week in the week to December 26, and cut their net short position in silver slightly, U.S. Commodity Futures Trading Commission data showed on Friday.

A rally in gold prices to the highest level in a month and the year-end holiday mood dampened demand across Asia last week. Source: Reuters