Gold firms above USD1,620 with ECB, Fed minutes in focus

Investing.com - Gold futures were little changed in rangebound trade during early European hours on Tuesday, as market sentiment remained supported by hopes of progress in tackling the debt crisis in the euro zone, ahead of a series of meetings this week.

Market participants were also anticipating the minutes of the Federal Reserve’s August policy meeting later in the week, amid speculation over how close the U.S. central bank may be to implementing another round of stimulus measures.

On the Comex division of the New York Mercantile Exchange, gold futures for October delivery traded at USD1,623.25 a troy ounce during early European trade, adding 0.15%.      

Prices were stuck in a narrow trading range of USD1,618.95 a troy ounce, the daily low and a session high of USD1,624.35 a troy ounce, which was the strongest level since August 13.

Gold futures were likely to find near-term support at USD1,601.05 a troy ounce, the low from August 16 and resistance at USD1,629.25, the high from July 31.

Investors shrugged off remarks by German policy makers opposing the European Central Bank's plan to buy more government bonds.

Luxemburg’s Prime Minister Jean-Claude Juncker, who also heads the group of euro zone finance ministers, was to hold talks with Greek Prime Minister Antonis Samaras on Wednesday, to discuss a two-year extension of the country’s economic reform program.

Meanwhile, German Chancellor Angela Merkel is to meet with French President Francois Hollande on Thursday, while Antonis Samaras is to meet with the French and German leaders later in the week.

On Monday, the European Central Bank dismissed reports that reports that it may set a cap on peripheral euro zone bond yields, saying it was "absolutely misleading" to report on decisions that have not yet been taken.

Market participants were also anticipating the minutes of the Fed’s August policy meeting later in the week.

Upbeat U.S. economic data released last week indicated that the economy may be stabilizing and tempered expectations for another round of quantitative easing by the Fed.

Moves in the gold price this year have largely tracked shifting expectations as to whether the U.S. central bank would pump more money into the financial system.

Elsewhere on the Comex, silver for September delivery rose 0.6% to trade at a two-month high of USD28.77 a troy ounce, while copper for September delivery climbed 0.85% to trade at USD3.400 a pound.