NEW YORK (
clawed their way higher Wednesday as moderate buying continued, but prices were still trapped in a tight range.
Gold for February delivery added $2 to $1,370.20 an ounce at the Comex division of the New York Mercantile Exchange. The gold price traded as high as $1,378.90 and as low as $1,365.50 during Wednesday's session. The spot gold price was adding more than $3, according to Kitco's gold index.
U.S. dollar index
was drifting lower down 0.62% to $78.50 while the euro was rallying 0.74% to $1.34 vs. the dollar.
Gold prices seem to be looking for some kind of catalyst to break them out of their range of $1,320-$1,420 an ounce. Traders are nibbling at gold after the metal stemmed its Friday selloff, but any big positions are being kept on the sidelines until an upward trend can be confirmed. Any run-up, as was seen in early morning trading, can also provide an opportunity for investors to take profits.
The popular gold exchange-traded fund,
SPDR Gold Shares
, shed almost 3 tons on Tuesday as light profit-taking continued while
iShares Gold Trust
has not adjusted its tonnage since Dec. 23.
Scott Redler, chief strategic officer for
, says that gold has lost its identity a bit and it's no longer a fear trade.
"I think gold could regain this identity as we go into the second quarter" as debt issues in U.S. states and controversy on raising the debt ceiling put money issues in the foreground.
"Long term, as long as the Fed continues to pump money into the system [and] there are problems in the eurozone," argues Phil Streible, senior market strategist at Lind-Waldock, "I think gold will continue to catch a bid."
>> Video: ETF Sees Investors Holding Gold
Jim Cramer writes on RealMoney.com
that he still likes gold as a hedge, that "the amount of money that is being printed worldwide is outrageous and I can only conclude that you need something as a hedge to the printing press."
Cramer likes the GLD and currently owns
, a junior gold and copper miner, for his charitable trust,
Action Alerts Plus.
The spot price is also stronger than the futures price which points to strong physical buying most likely from emerging-market countries like India and China where inflation is high. China is also buying gold ahead of its New Year celebration in February.
George Gero, vice president at RBC Capital Markets, also notes that
ETFS Physical Asian Gold
, which launched on Friday, helped physical demand as gold was needed to fulfill orders. The ETF stores its gold in Singapore.