Gold futures resumed their advance in Asia Wednesday on optimism the U.S. Federal Reserve will commit to further asset purchases at its monetary policy meeting later in the day.
Futures for the precious metal’s delivery in February inched up $2.30, or 0.1%, to $1,711.90 an ounce in electronic trading, to rebound after their $4.80 decline on the Comex division of the New York Mercantile Exchange overnight — their first drop in four sessions.
Several analysts expect the Fed to continue purchases of longer-maturity securities beyond the year-end expiry of its Operation Twist — the name given to a policy to sell short-term securities and buy an equal amount of longer-maturity securities.
“In addition to the potential for an accelerated Fed balance-sheet expansion from purchases of Treasurys, further weakness in the U.S. dollar should lend support for bullion,” HSBC analyst James Steel wrote in a note to clients.
A depreciation in the dollar tends to pull investors towards gold as a store of wealth.
By mid-afternoon in Tokyo Wednesday, the ICE dollar index , a measure of the greenback’s performance against a basket of six major global currencies, was at 80.078, compared with 80.061 in North America late on Tuesday.
Among other metals, March futures for silver and copper rose 0.2% to $33.07 an ounce and 0.1% to $3.69 a pound, respectively.
Palladium for delivery in the same month fell 0.3% to $694.45 an ounce, while January platinum futures lost 0.4% to $1,633.80 an ounce.