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Gold prices up in Asia ahead of Chinese New Year holidays

Published 02/12/2015, 07:18 PM
Updated 02/12/2015, 07:19 PM
Gold prices up in Asia

Gold prices up in Asia

Investing.com - Gold prices gained in Asia on Friday as investors eyed demand from the upcoming Chinese New Year holidays next week.

On the Comex division of the New York Mercantile Exchange, gold futures for April delivery rose 0.25% to trade at $1,223.80 a troy ounce.

Also on the Comex, silver futures for March delivery rose 0.42% to trade at $16.865 a troy ounce.

Elsewhere in metals trading, copper for March delivery fell 0.04% to trade at $2.601 a pound.

Overnight, gold extended gains on Thursday, after weaker than expected U.S. retail sales and jobless claims data dampened optimism over the strength of the economic recovery.

The U.S. Commerce Department said that retail sales declined by 0.8% last month, worse than expectations for a drop of 0.5%.

Core retail sales, which exclude automobile sales, slumped by 0.9% in December, disappointing forecasts for a 0.4% decline.

Rising retail sales over time correlate with stronger economic growth, while weaker sales signal a declining economy.

Core sales correspond most closely with the consumer spending component of the government's gross domestic product report. Consumer spending accounts for as much as 70% of U.S. economic growth.

At the same time, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending February 7 increased by 25,000 to 304,000 from the previous week’s revised total of 279,000. Analysts had expected initial jobless claims to rise by 6,000 to 285,000 last week.

The disappointing data scaled back expectations that the Federal Reserve will start raising rates from near zero levels as early as June.

Dollar weakness has been fueling the rally in gold as economic uncertainties and speculation on more monetary easing by central banks drive investors to bullion as an alternative investment.

Market sentiment remained subdued after talks between Greece and European Union officials ended without an agreement, though both sides said there was still hope for a deal. Further talks are due to be held next Monday.

Greece’s current bailout is due to expire on February 28 and the new Greek government does not want it extended, fuelling fears over a conflict with its creditors which could trigger the country’s exit from the euro zone.

Athens has proposed an overhaul of 30% of its massive bailout deal, replacing it with a 10 point plan of economic reforms.

However, Greece’s creditors in the EU are insisting that the country must stick to the terms of the original bailout agreement.

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