SINGAPORE: Spot gold inched up and Tokyo gold hit a record high on Tuesday after the Bank of Japan, as expected, took bold steps to stimulate the economy, although a lack of fresh catalysts may trap bullion within its recent range. The Bank of Japan announced on Tuesday its most determined effort yet to end years of economic stagnation, saying it would switch to an open-ended commitment to buying assets next year and doubling its inflation target to 2 per cent. The easing move sent the yen lower initially, before the currency firmed against the greenback later in the day. Tokyo's benchmark gold futures contract rose to a record high of 4,913 yen. "We saw some selling right after the BOJ news when yen weakened initially," said a Tokyo-based trader. "But since the yen strengthened physical traders have refrained from further selling." High yen-priced gold will still attract some retail selling, he added. Spot gold inched up 0.2 per cent to $1,693.46 an ounce by 0803 GMT, close to a one-month high of $1,695.56 hit last week. US gold gained 0.4 per cent to $1,693.30. Gold has lacked momentum to break the key resistance of $1,700 an ounce, despite the BOJ easing and seasonal support from the physical market. "Gold really needs to break above $1,700 and close above that level to attract short-term buyers, but the momentum has not built up that much, even when we are right before the Lunar New Year and physical demand is steady," said Peter Tse, director at ScotiaMocatta. Trading volume on the three gold contracts on the Shanghai Gold Exchange stood at 28,060.2 kilograms on Tuesday, down from this year's high of 42,839 kg in early January. Trading volume on the gold futures contracts on the Shanghai Futures Exchange declined to 21,516 contracts, or 21,516 kilograms, on Monday, the lowest since mid-2011. Technical analysis suggested spot gold needs to stand steady above resistance at $1,694 an ounce to confirm a bullish target at $1,706, said Reuters market analyst Wang Tao. The much-watched US debt ceiling talks have showed signs of progress. Republican leaders in the House of Representatives have scheduled a vote on Wednesday on a nearly four-month extension of US borrowing limit, but the bill does not specify a dollar amount. India raised import tax on gold ores and dore bars to 5 per cent from 2 per cent, following a tax hike on bullion on Monday, as the government tries to rein in a ballooning current account deficit. Traders said the move has been largely priced in by the international market, and the impact on gold consumption would be limited as higher tariff may trigger more smuggling. Spot platinum rose 0.7 per cent to $1,685.24, in a discount to gold for a third straight session after briefly regaining premium last week.

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