Investing.com - Gold prices inched higher on Tuesday, as market players looked ahead to the release of key U.S. data later in the session for further indications on the strength of the economy and the possible future path of monetary policy.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery tacked on $3.90, or 0.33%, to trade at $1,200.50 a troy ounce during European morning hours.
A day earlier, Comex gold prices lost $1.80, or 0.15%, to settle at $1,196.60 an ounce.
Futures were likely to find support at $1,177.00, the low from November 20, and resistance at $1,208.20, the high from November 21.
U.S. economic growth in the third quarter is expected to be revised down to 3.3%, compared to an initial estimate of 3.5%.
The U.S. will also publish a closely-watched report on consumer confidence for November.
Despite recent gains, gold prices are likely to remain vulnerable in the near-term amid indications a strengthening U.S. economic recovery will force the Federal Reserve to start raising interest rates sooner and faster than previously thought.
Expectations of higher borrowing rates going forward is considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise.
Meanwhile, the euro remained under pressure after European Central Bank President Mario Draghi reiterated last week that the central bank is ready to expand its stimulus program to raise inflation as quickly as possible.
The ECB's current stimulus program includes purchases of asset-backed securities and covered bonds, though markets are keeping a close eye out for plans to announce purchases of government debt, a stimulus tool known as quantitative easing.
The US dollar index, which tracks the greenback against a basket of six major rivals, rose 0.1% to hit 88.27, not far from Monday's four-year high of 88.52.
A stronger U.S. dollar usually weighs on gold, as it dampens the metal's appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies.
Also on the Comex, silver futures for March rallied 28.5 cents, or 1.73%, to trade at $16.72 a troy ounce.
Elsewhere in metals trading, copper for March delivery rose 0.4 cents, or 0.15%, to trade at $3.011 a pound.
Traders continued to weigh whether a surprise rate cut in China last week would translate into increased demand for the industrial metal.
The move came in response to recent signs of a slowdown in the world’s second-largest economy.
The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.