By V. Phani Kumar, MarketWatch
HONG KONG (MarketWatch) — Gold futures jumped during the Asian trading day on Tuesday, placing the precious metal on course for a positive start to a new year, as a weakened U.S. dollar aided an extension of Friday’s gains after a decline in the fourth quarter of 2011.
The February gold futures contract GC2G +1.50% added $13.10, or 0.8%, to $1,579.90 an ounce in electronic trading.
The precious metal had risen $25.90 on Friday to pare its losses during the three months ended Dec. 31 to 3.4%.
But gold still ended the year with a net gain of more than 10%, ranking among the best investment classes during a tumultuous year, underpinned by worries about the euro-zone debt crisis.
Some analysts remained optimistic about gold in 2012, in anticipation of a boost to the metal’s demand from quantitative easing, or QE, measures by the U.S. Federal Reserve and the European Central Bank.
Merrill Lynch analysts said they expected gold prices to average $1,850 an ounce in 2012, representing a 17.6% increase over the 2011 spot price average.
“We believe the high cost structure of the global gold sector should provide support to hold bullion above the $1,400 [per ounce] level,” they said.
Spot gold prices were trading up $13.80 at $1,580.20 an ounce.
Among other metals, the March contract for silver SI2H +1.83% added 0.9% to $28.16 an ounce, but palladium futures for the same month PA2H +0.20% fell 0.6% to $652 an ounce.
March copper futures HG2H +1.67% added 1.2% to $3.48 a pound, while April futures for platinum PL2J +0.72% advanced 0.4% to $1,410.50 an ounce.
The U.S. dollar declined meanwhile, with the ICE dollar index DXY -0.22% slipping 0.1% to 80.081.
Varahabhotla Phani Kumar is a reporter in MarketWatch's Hong Kong bureau.
