Gold Prices Firm

In an apparent testimony to its staying power, investor confidence in precious metal gold held firm on Thursday, as the world awaits the results of Spain's bond auction as well as news of an assessment meeting by the European Central Bank (ECB) of the region's fiscal meltdown.

Prices of spot gold jumped 0.2 per cent to $1,643.29 an ounce as of 0024 GMT, continuing its grip above the key 200-day moving average at $1,636. Prices of U.S. gold rose 0.3 per cent to $1,644.30.

Spain is scheduled to hold today its first bond auction for the year, while the ECB is likewise expected to announce today its first monetary policy announcement and interest rate declaration for 2012 to circumvent the downfall of the euro, which has fallen to its 16-month low against the dollar.

On Wednesday, investor interest perked up driven by data that showed China's and India's heavy buying of the yellow metal in late 2011.

According to the Hong Kong Census and Statistics Department, imports of gold by the world's second-largest economy reached 102,779 kilograms in November, up from 86,299 kilograms in October, prompting the bullion to rally to a four-week high.

China's purchases of the precious metal gold is seen to continue this month as the Chinese nationals prepare for this year's Lunar New Year which start on Jan. 23.

Gold acquisition by India were likewise picking up, after the rupee hit a one-month high against the dollar, as well as in anticipation of the upcoming Pongal festival, the country's annual wedding season.

Both the Chinese and Indian traditions support well for gold buying sprees of both Asian nations which are regarded as the world's top two buyers of the yellow metal.

Regardless of rollercoaster prices, demand for gold will push on investors continue to fear the worst of the fiscal meltdown affecting most developed economies today.