By Claudia Assis and Michael Kitchen, MarketWatch
SAN FRANCISCO (MarketWatch) — Gold futures rose Monday, extending gains made at the end of last week, as the euro gathered steam and market optimism and risk appetite spilled over to the metal and other commodities.
Gold for February delivery GC2G +1.00% rose $9, or 0.5%, to $1,673 an ounce on the Comex division of the New York Mercantile Exchange. A settlement around these levels would be gold’s highest in six weeks.
The dollar traded lower, offering support for gold and other dollar-priced commodities.
The euro gained as investors grew more optimistic Greece’s debtors would eventually cut a deal with the embattled euro-zone country, reducing Greece’s debt significantly.
The dollar index DXY -0.65% , which compares the U.S. unit to a basket of six currencies, traded at 79.669 from 80.148 in late North American trading Friday. Read about Monday’s action in currencies.
Investor interest in gold, which faltered late last year but has outperformed most assets in the new year, has grown. Net long positions in gold, or bets prices will go higher, are at a four-week high, analysts at Commerzbank said in a note to clients Monday.
The advance came as Europe imposed an embargo against Iran and froze assets of its central bank in an effort to get the Iranian authorities to scale back its nuclear program. The embargo includes a block in all trade in gold and other precious metals as well as diamonds.
Meanwhile, volume for Asian metals trading was reportedly thin, as many Asian markets, including China’s, the world’s top consuming gold nation, were closed for the Lunar New Year holidays.
Without Asian markets “the floor for prices could be fragile this week,” analysts at Barclays Capital said in a note to clients. The “broader backdrop remains favorable for gold,” however, amid the improved market sentiment and “resilient” physical demand in China and India, they said.
The broader suite of metals tracked gold higher on Monday. March silver SI2H +3.05% added 82 cents, or 2.6% to $32.49 an ounce. March copper HG2H +1.64% advanced 6 cents, or 1.7%, to $3.81 per pound.
On Friday, gold settled with a 0.6% gain, while silver rallied 3.8%. Friday’s metal-futures moves
