Physical Gold Demand Up Supported Asia

Gold moved higher on Tuesday, a significant rebound from a three-session amid signs of strong demand in China ahead of the Lunar New Year holiday, the meeting of the ECB become the next market focus.Economists expect the ECB to keep interest rates unchanged at a meeting on Thursday, supporting the single currency euro, while the dollar index fell slightly, making commodities priced in dollars more affordable for buyers holding other currencies.The precious metal managed to buck the trend in the commodity complex. Gold prices rose for the first time in three days and closed up nearly 1% on strong physical demand and bargain-hunting in Asia. Platinum and silver also rose.This is the first time the market has increased since the closure Wednesday amid caution that the U.S. Federal Reserve may ease monetary policy highly stimulative.Spot gold rose 0.8% to $ 1,658.50 per ounce at the close of Tuesday's session.Asian physical market has moved up so far this year, with buyers tempted by a big drop in gold prices last week - when prices retreated to as low as $ 1,625 per ounce - and rising demand ahead of the Lunar New Year, traders said.Net gold flow from Hong Kong to mainland China in November touching the second highest level in 2012 after April, adding to evidence the gold appetite continues in China, which provides support to the gold price.Minutes of the Fed's policy meeting in December, which was released on Thursday, showed some central bank officials to consider slowing or stopping its quantitative easing (QE) in which investors have thought in their economic outlook. The Fed's balance sheet nearly $ 3 trillion pose a risk of instability in the further development, according to Fed officials.Successive rounds of QE, or printing new money to increase asset prices, has been the main driver of higher gold prices in recent years. The move has put pressure on U.S. long-term interest rates and sparked fears of inflation.