Gold prices gain in early Asia as regional data, Trump policies in focus

Investing.com - Gold prices gained in Asia on Monday ahead of key regional data sets and as investors continued to see demand potential spurred by expected infrastructure spending plans by president-elect Donald Trump with the Republican part in control of both house of the U.S. Congress.

Later on Monday out of China comes fixed asset investment for October with an 8.2% rise seen year-on-year and industrial production expected up 6.2% and retail sales seen rising 10.7%. China is the world's second largest crude importer with demand closely tied to economic growth rates. Japan also reports provisional third quarter GDP figures.

Gold for December delivery on the Comex division of the New York Mercantile Exchange rose 0.13% to $1,228.75 a troy ounce. Also on the Comex, silver futures for December delivery gained 0.75% to $17.462 a troy ounce, while copper futures showed a 0.52% increase to $2.520 a pound.

Copper was boosted after Trump raised the prospect of increased infrastructure spending, while recent signs of strengthening demand in China have also underpinned prices.

Later this week, investors will be looking to congressional testimony by Fed Chair Janet Yellen on Thursday for fresh indications on whether interest rates will rise next month.

Last week, gold prices fell to five month lows on Friday as risk appetite recovered following Trump’s victory in the U.S. presidential election, sapping investor demand for safe haven assets.

Market sentiment was boosted by optimism that increased fiscal spending and tax cuts under a Trump administration will spur economic growth and inflation.

Gold prices were also pressured lower by the stronger U.S. dollar and ongoing expectations for a Federal Reserve interest rate increase in December.

Expectations for higher U.S. interest rates remained intact amid optimism that a pick-up in growth will allow the Fed to tighten borrowing costs.

Investors currently price an 81.1% chance of a rate hike at the Fed's December meeting; according to federal funds futures tracked Investing.com's Fed Rate Monitor Tool.

Gold is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar in which it is priced.