Gold Retreats But Remains Near Key Level

Gold futures slipped in Asia trading hours on Thursday to give back some of the gains made in the previous session, but U.S. political divisions over the fiscal cliff helped put a floor under prices.

Gold for December delivery  edged down $3.90 to $1,726.20 an ounce in electronic trade on the Comex division of the New York Mercantile Exchange.

During the regular Nymex session Wednesday, the precious metal rose $5.30, or 0.3%, to settle at $1,730.10 an ounce.

GFT Markets technical analyst Fawad Razaqzada equated Wednesday’s gains for gold with a search for safe-haven assets.

“Gold and silver edged higher on Wednesday as equities sold off. Investors are clearly worried about the looming fiscal cliff and are appropriately increasing their bullish positions in precious metals,” he said.

Gold needs to close over its $1,740 resistance to attract fresh buyers, he said.

HSBC metal analysts expected gold to benefit as long as the fiscal cliff — more than $600 billion of tax hikes and spending cuts due to start in January if U.S. lawmakers don’t reach a deal — remains high on the radar for investors.

“A lack of progress in resolving the ‘fiscal cliff’ issue would be gold-friendly, we believe,” the analysts said. “The path of least resistance appears higher for bullion.”

The dollar was barely changed, offering little direction for gold. The ICE dollar index , which measures the greenback against a basket of six other currencies, edged down to 81.097 from 81.111 in late North American trading Wednesday.

Elsewhere in the metals complex, silver for December delivery   traded down 21 cents at $32.68 an ounce.

Copper for delivery in the same month  rose 1 cent to $3.46 per pound.

December palladium fell $7.45 to $634.10 an ounce, while January platinum  declined $6.90 to $1,584.70 an ounce.

Marketwatch