Gold climbs above $1,300 for first time since August ahead of ECB

Investing.com - Gold rallied above the $1,300-level for the first time in five months on Wednesday, amid growing expectations the European Central Bank will unveil a government bond-buying program when it meets later in the week.

On the Comex division of the New York Mercantile Exchange, gold futures for February delivery hit a session high of $1,303.60 a troy ounce, the most since August 19, before trading at $1,297.30 during European morning hours, up $3.10, 0.24%.

A day earlier, gold jumped $17.30, or 1.35%, to settle at $1,294.20 an ounce.

Futures were likely to find support at $1,255.20, the low from January 16, and resistance at $1,316.50, the high from August 15.

Also on the Comex, silver futures for March delivery tacked on 21.2 cents, or 1.18%, to trade at $18.16 a troy ounce, the highest level since September 19.

The euro remained under pressure amid mounting expectations that the ECB will embark on an outright quantitative easing program on Thursday, in a bid to stave off the threat of deflation in the euro area.

Uncertainty over the outcome of Greek elections, due to be held on Sunday, with anti-bailout party Syriza leading in the polls further boosted demand for safe haven assets.

Elsewhere in metals trading, copper for March delivery slumped 1.8 cents, or 0.67%, to trade at $2.577 a pound, as concerns over the global economic outlook and the impact on future demand prospects dampened the appeal of the commodity.

The International Monetary Fund cut its global growth forecast for 2015 on Tuesday to 3.5% from a previous estimate of 3.8%, citing slowing economies in China, Russia, the euro zone and Japan.

Meanwhile, the U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, declined 0.2% to 93.20.

Later in the day, the U.S. was to release data on building permits and housing starts, as investors look for further indications on the strength of the economy.