Updated from 11:50 a.m. EST with settlement prices and analyst comments
Gold for December delivery dipped $6.10 to $1,724.80 an ounce at the Comex division of the New York Mercantile Exchange. The gold price traded as high as $1,733.30 and as low as $1,717.60 an ounce, while the spot price was rising $1.70, according to Kitco's gold index.
"There's a lot of belief that once the European Union passes its new budget -- they had an OK auction -- and there's a lot of belief that those funds are going to become available for Greece," said Phil Streible, senior commodities broker at RJO Futures. "Once they become available you're going to see more of a risk-on type mentality."Silver prices for December delivery were gaining 19 cents to $32.72 an ounce, while the U.S. dollar index was off 0.01% at $81.06. The Greek parliament passed an austerity budget on Sunday for 2013, but European finance ministers on Monday didn't authorize fresh emergency loans to Greece. The eurozone leaders did reiterate confidence that the necessary avenues were in order to reduce the country's debt. "This really indicates a really strong resolve by the Greek authorities to actually deliver and implement on a very ambitious and important program, both from the growth perspective and from the perspective of debt sustainability," IMF Managing Director Christine Lagarde said at talks in Brussels. Spain also continued to refrain from bailout requests for its banks from the European Central Bank. The stimulus measures would be an appealing inflation play for gold prices. The United States budgetary uncertainty that must be addressed by the end of the year also is being followed closely by traders as it remains to be determined whether lawmakers will reach a resolution or go over the so-called fiscal cliff -- the across-the-board deep spending cuts and expiration of Bush tax cuts. Analysts have said a prolonged debate over the fiscal cliff could cause the gold trade to be volatile, but also make the yellow metal an appealing safe haven. "My advice to traders, really, is basically you want to be out of gold positions now and kind of on the sideline until you see $1,730 [an ounce] across on the upside, otherwise you're best to wait," said David Banister, chief investment strategist at TheMarketTrendForecast.com.
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