Gold Prices Flat as Dollar Dips (Update 1)

Updated from 11:31 a.m. ET with settlement prices

NEW YORK (TheStreet) -- Gold prices were unchanged Monday as the U.S. dollar retreated against the euro.

Gold for December delivery settled unchanged at $1,730.90 an ounce at the Comex division of the New York Mercantile Exchange. The gold price traded as high as $1,738 and as low as $1,725.20 an ounce, while the spot price was off $1.90, according to Kitco's gold index.

"There's still a lot of underlying issues in Europe and ... it's going to take some time," said Alex Ashby, research analyst at Global X Funds. "There were some positive developments in terms of austerity packages getting pushed through and approved in Greece, but then there's still uncertainty for the creditors."

Silver prices for December delivery lost 8 cents to close at $32.52, while the U.S. dollar index was off 0.02% to $81.03.

The Greek parliament managed on Sunday to pass an austerity budget for 2013, which, coupled with a Wednesday vote on austerity, signaled the country had met requirements needed to receive a fresh €31.5 billion in emergency loans.

Investors were eying a weak third-quarter gross domestic product report from Japan as it contracted 0.9% quarter over quarter and dipped 3.5% on an annualized basis. The report puts pressure on Japan's central bank to consider more quantitative easing -- a move that investors view as inflationary, which typically boosts the price of gold.

China reported over the weekend that its industrial production grew 9.6% year over year, suggesting that the country was not in immediate danger at falling into a recession.

Congress and President Barack Obama returned to Washington the week after the election to begin to address the so-called fiscal cliff. Ashby said uncertainty surrounding a budget deal before the end of 2012 could have a positive effect on the yellow metal.

"A lot of the demand is driven by some of this uncertainty," said Ashby. "I think as we sort of move closer to the end of the year and the deadline of the fiscal cliff and the implication there -- I think the closer we get without clear policy indicators of either compromise, or at the very least an extension of current rates ... you're going to see increased demand for gold as people view the probability of an agreement not being reached as higher and higher."

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