On the Comex division of the New York Mercantile Exchange, gold futures for October delivery were up 0.16% and trading at USD1,624.35 a troy ounce, up from a session low of USD1,622.05 and down from a high of USD1,624.85 a troy ounce early during the session.
Gold futures were likely to test support at USD1,615.55 a troy ounce, the low from July 30, and resistance at USD1,628.55, the high from July 27.
The European Central Bank and the Federal Reserve are due to address monetary policy this week, and talk continued to build in precious metals markets Tuesday that the Fed may hint at rolling out a third round of quantitative easing to spur U.S. recovery, while the ECB may hint at a need for similar tools to lower borrowing costs and steer the European economy towards growth.
Under quantitative easing, the Fed buys bonds held by banks, pumping liquidity into the economy and weakening the greenback in the process.
The dollar and gold trade inversely from one another and mere talk of quantitative easing can send the greenback falling and gold rising.
ECB stimulus often sends the euro falling and the dollar rising, though gold can track the dollar if the European monetary authority intervenes with stimulus.
Spain, meanwhile, announced the economy contracted 0.4% on year in the second quarter, in line with expectations.
Broader sentiment in Europe, meanwhile, took a turn for the worse.
The European Commission’s index of economic sentiment across the eurozone dropped to 87.9 in July compared with 89.9 in June.
Analysts were expecting a reading of 88.7.
Elsewhere on the Comex, silver for September delivery was up 0.29% and trading at USD28.115 a troy ounce, while copper for September delivery was up 0.18% and trading at USD3.429 a pound.
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