Gold prices rose in Asian trade on Tuesday on light buying out of China, but trading was thin after the long Christmas weekend, even as a firm dollar capped the gains. Spot gold was up half a percent at $1,139.20 an ounce by 0705 GMT, after earlier edging down to $1,131.35. US gold futures rose 0.6 percent to $1,140.20 per ounce. "It's pretty much Chinese demand at the moment, although it's very thin," said Alex Thorndike, senior precious metals dealer at MKS PAMP Group.
The dollar rose against the yen and euro as some investors emerged out of the holiday lull to hunt for bargains as the market entered the last trading stretch of the year. "People are waiting until Trump becomes the US President and until we see his real policies or what he will do when he takes the office," said Yuichi Ikemizu, head of commodity trading at Standard Bank in Tokyo.
"People are just watching the other markets like dollar and stock markets and kind of expecting the stock market and financial market to be good under Trump government. In that case, people don't need gold and instead invest in stocks." The US currency had climbed to a 10-month high of 118.660 yen mid-month on expectations of stronger growth after US President-elect Donald Trump takes office in January. A firm dollar curbs demand for commodities priced in the greenback by making them more expensive for holders of other currencies.
Asian stocks were mixed on Tuesday, in thin trade and with little to guide them as most major markets were closed on Monday for Christmas holidays. Hedge funds and money managers cut their net long position in COMEX gold for a sixth straight week in the week to December 20, Commodity Futures Trading Commission data showed. Gold demand in India remained subdued last week despite a sharp fall in prices to over 10-1/2 month lows as a severe cash crunch and holidays kept buyers away from the market, while premiums in China fell from near 3-year highs touched in the prior week. Among other precious metals, silver was up 1.2 percent at $15.91 an ounce- its biggest daily rise since December 12.
Platinum gained 1.3 percent to $900, snapping six straight sessions of losses. Palladium rose nearly a percent at $662 an ounce, on track for its biggest one-day rise in two weeks.
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