Gold Futures Tick Higher In Asia Trading

Gold futures ticked higher in electronic trading Tuesday, building on gains made in the previous session, to trade just over the $1,670-an-ounce mark.

February gold  rose $1.60 to $1,671.20 an ounce in Asia electronic trading.

Martin Hennecke, associate director at independent investment advisory firm Tyche Group, sounded an optimistic note on gold Tuesday, citing stronger gold interest in Japan amid a rising inflation outlook there.

The Bank of Japan is expected to agree to newly returned Prime Minister Shinzo Abe’s demand for a firm 2% inflation target, up from a current informal goal of 1%.

At the same time Chinese demand for gold through Hong Kong has been very strong, according to Hennecke, who said 2012 imports are expected to be almost twice those of 2011, exceeding Japan’s entire central bank gold reserves.

Tuesday’s gains for gold built on its advance Monday, when the precious metal rose $8.80, or 0.5%, to settle at $1,669.40 an ounce on the Comex division of the New York Mercantile Exchange.

Meanwhile, HSBC metal analysts said that they saw the current lack of progress among U.S. lawmakers on a budget deficit deal as “gold friendly.”

They said that gold prices are historically sensitive to U.S. deficit developments, noting that the 2011 negotiations in Washington over the debt limit coincided with gold prices hitting an all-time high of $1,921 an ounce.

U.S. dollar support for the precious metal was relatively limited Tuesday, with the ICE dollar index , at 79.474 Tuesday, just up from 79.460 in late North American trading Monday but below Friday’s 79.566 level.

Around the wider metals complex, silver for delivery in March  advanced 3 cents to $31.14 an ounce, and April platinum  rose $4.40 to $1,662.60 an ounce.

March palladium  gained $1.95 an ounce to trade at $705.25 an ounce, while March copper  tacked on 1 cent to reach $3.64 a pound.

Marketwatch