Gold Prices Hover Near the Flatline (Update 1)

Updated from 12:19 p.m. EST with settlement prices

NEW YORK (TheStreet) -- Gold prices dragged along the flatline Tuesday after the Group of Seven countries issued a statement about their commitment to foreign exchange markets.

Gold for April delivery settled up 50 cents to $1,649.60 an ounce at the Comex division of the New York Mercantile Exchange . The gold price traded as high as $1,653.80 and as low as $1,639.50 an ounce, while the spot price was adding $2, according to Kitco's gold index.

Gold prices, which have been stuck in a tight trading range for weeks and hit a new five-week low overnight, continue to track the rhetoric unfolding from Bank of Japan, the European Central Bank and other central banks about currency valuation.

"It absolutely has to affect gold prices, because a currency war is basically a debasement of a currency, whether it's a dollar or yen, Chinese yuan or a euro," said David Williams, director of Strategic Gold Corp. "As they debase the currencies, something has to have value, something has to contain value and I believe that's going to be gold."

Silver prices for March delivery climbed 11 cents to $31.02 an ounce, while the U.S. dollar index was shedding 0.40% to $80.06.

"We reaffirm that our fiscal and monetary policies have been and will remain oriented towards meeting our respective domestic objectives using domestic instruments, and that we will not target exchange rates," the G7 ministers and governors wrote in a statement released through the Bank of England.

Reports later emerged that the statement aimed at recent movement in the Japanese yen.

"The G7 is concerned about unilateral guidance on the yen," an official told Reuters on Tuesday. "Japan will be in the spotlight at the G20 in Moscow this weekend."

The Lunar New Year holiday will continue through the rest of this week, which likely would take a bite out of physical demand in the yellow metal -- an issue that may have contributed to the dip in gold prices on Monday.

North Korea conducted an underground nuclear bomb test on Tuesday hours before President Barack Obama was expected to give his annual State of the Union address to a joint session of Congress.

Though the announced test elicited a strong reaction by the United Nations, the United States and others -- a sign that nuclear tests by North Korea may provoke instability in international diplomacy -- gold prices remained unaffected by the action.

Gold mining stocks were mixed on Tuesday. Shares of Randgold Resources (GOLD) were losing 1.2%, while shares of Royal Gold (RGLD) were jumping 3.4%.

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