Gold Retakes Some Losses, Stays Below $1,700

Gold futures climbed to edge off near three-month lows on Wednesday, but the precious metal remained well below the psychologically important $1,700 an ounce mark.

Gold for February delivery  rose $5.20 to $1,675.90 an ounce on the Comex division of the New York Mercantile Exchange.

In Tuesday’s regular Nymex session, the precious metal contract fell $27.50, or 1.6%, to settle at $1,670.70 an ounce — its lowest settlement price since Aug. 30.

The drop on Tuesday followed a rise in U.S. home-builder confidence, progress in negotiations to avert the U.S. fiscal cliff and a credit-rating upgrade for Greece — factors that worked to dull the metal’s safe-haven appeal.

“Perceptions of a more positive tone around the fiscal-cliff negotiations are keeping a floor under risk appetite,” said Sue Trinh, strategist at RBC Capital Markets.

Some willingness to take on risk undermined the U.S. dollar as well, however, and the ICE dollar index  slipped to 79.273 on Wednesday, down modestly from 79.349 in late U.S. trading on Tuesday.

This provided a bit of support for gold, which is priced in dollars and so becomes more attractive to holders of other currencies when the dollar falls.

Chris Weston at IG Markets cited “talk on the floors that a big fund was liquidating, which in turn triggered stops down to $1,661” for gold on Tuesday.

Still, he said that “gold bulls will be glad this level held, as not only is $1,661 the exact 50% retracement of the May-October rally, but the 200-day moving average. A close below there would have seen further fund selling.”

Around the wider metals complex, silver for March delivery  rose 2 cents to $31.69 an ounce.

March palladium  climbed $2.10 to $693.05 an ounce, while January platinum  rose $1.60 to $1,595.30 an ounce.

Copper for March delivery  traded flat at $3.65 a pound.

Marketwatch