TOKYO (MarketWatch) -- Gold futures tacked on as much as $12 an ounce in electronic trading by the afternoon in Tokyo to nearly $1,067, continuing to find support from further weakness in the U.S. dollar and other factors.
Gold for December delivery was up $10.30, or 1%, at $1,064.30 an ounce on Globex. The contract reached a high of $1,066.90 in afternoon trading, building on an already strong gain of $13.60, or 1.3%, Monday on the New York Mercantile Exchange.
In currencies trading Tuesday in Asia, the U.S. dollar weakened against various rivals, raising gold's investment appeal. One dollar bought 90.20 Japanese yen, down from 90.39 yen late Monday in New York.
Gold has also found support due to technical buying and a lack of major negative news, according to Chintan Karnani, analyst at Insignia Consultants in New Delhi.
The International Monetary Fund gold sales to Indian central banks of around 200 metric tons, however, had already been discounted in by the markets, he said.
And gold traders are "position building" ahead of the three major upcoming central bank meetings: the U.S. Federal Reserve, the European Central Bank and the Bank of England, he said, with none of them expected to change their interest-rate outlook until the first quarter of 2010.
"In my view, it will be a very volatile week," said Karnani.
Hangover risk
Looking ahead, it's possible that gold prices will test their previous high, analysts at Credit Suisse said in a research note issued Tuesday.
In mid-October, front-month futures climbed above $1,070, the highest nominal level for a front-month contract.
"But further event risks loom over the course of the week, with the [Federal Open Market Committee] meeting taking place on Wednesday," the Credit Suisse analysts said.
The FOMC may alter its statement to a "less dovish tone, which could trigger some profit-taking across the precious metals space," they said.
