Gold prices rose on Tuesday to a near two-week high on weak Japanese inflation data, but trading was thin with traders in the United States returning after the long Christmas weekend and London markets still closed. Most analysts believe broad concerns about European banks and uncertainty around US President-elect Donald Trump's policies will likely support gold prices in 2017. However, the price of gold could tumble over the near term if US bond yields continue to climb, they said.

Markets including the UK, Australia, New Zealand and Canada were closed for the holidays on Tuesday. Spot gold was up 0.5 percent at $1,139.42 an ounce by 2:48 pm EST (1948 GMT) after hitting its highest since December 14 at $1,148.98 an ounce. US gold futures ended the session 0.45 percent higher at $1,138.80 per ounce. Data showed Chinese industry racked up its strongest profit growth in three months in November, suggesting the world's second-largest economy was improving. In Japan, however, core consumer prices fell in annual terms for the ninth month as household spending slumped.

"Maybe a top is in on Japan's growth and with that you could start to see stimulus measures and that's why gold and silver ticked up," said Phillip Streible, senior commodities broker for RJO Futures in Chicago. Among other precious metals, spot silver was up 1.6 percent at $15.965 an ounce. Platinum gained 1.3 percent to $900 per ounce, snapping six straight sessions of losses. Palladium rose 2.8 percent to $674.4 an ounce, on track for its biggest one-day rise in more than a month.

Copyright Reuters, 2016