Precious metals turn bright

The seven-day rally has resulted in a 7.1% rise in gold prices

Bullion metals ended higher at Comex on Tuesday, 20 January 2015. More safe-haven demand and chart-based buying propelled the gold market to a 5.5-month high Tuesday. This week is an extra important one for the market place and many traders and investors are anxious. The coming days will see critical fundamental news, and price action in many markets could be extra volatile as the week progresses. Also supportive for gold prices are reports that said demand for gold exchange traded funds (EFTs) has significantly increased recently.

Gold for February delivery settled up $17.30, or 1.4%, at $1,294.20 an ounce, on the New York Mercantile Exchange. The seven-day rally has resulted in a 7.1% rise in gold prices. In January, gold is up 9.3%. That follows depressed prices toward the end of 2014 due to year-end tax-loss selling.

March silver futures advanced 21 cents, or 1.2%, to settle at $17.96 an ounce.

In overnight news, the International Monetary Fund downgraded its 2015 world economic growth forecast by 0.3%, to 3.5%. The IMF cited major currencies' depreciation against the U.S. dollar as a negative world economic growth factor.

China on Tuesday reported its 2014 GDP came in at 7.4% growth, which is the weakest annual reading in many, many years. However, fourth-quarter China GDP was reported up 7.3%, year-on-year, which was better than expected. China also received an upbeat industrial production report Tuesday. The market place read this latest China data as a mixed bag.

On Thursday the European Central Bank holds its monthly monetary policy meeting. France's president revealed on Monday the ECB will announce a quantitative easing plan at Thursday's meeting. Many had already expected the ECB to make its monetary policy stimulus move at this meeting.

This weekend brings the much-anticipated Greek elections, which could determine if that country remains a member of the European Union.

On Wednesday the annual World Economic Forum begins in Davos, Switzerland. Movers and shakers from around the world will be at the event.

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