Updated from 10:35 a.m. EDT with settlement prices
NEW YORK (
Gold prices edged up Tuesday as investors mostly sat on the sidelines waiting to see how eurozone leaders plan to handle the details of addressing the region's debt problems.
Gold for December delivery gained 60 cents to settle at $1,771.20 an ounce at the Comex division of the New York Mercantile Exchange. The
gold price traded as high as $1,775.90 and as low as $1,753.20 an ounce, while the spot price was gaining $6.50, according to Kitco's gold index.
"It's just seesawing back and forth based on the last headline," said George Gero, precious metals strategist at RBC Wealth Management. "Everybody's waiting to see, because there was some chatter about Spain and whether the eurozone ministers are getting their act together or not."
Silver prices for December delivery settled up 35 cents to $34.72 an ounce, while the
U.S. dollar index was up 0.35% to $79.23.
The yellow metal looked to
reports of mounting worries
that European leaders would not be able to reach an agreement on a banking union, and that if they settled a resolution, it would take years to implement.
Further evidence that gold traders weren't committed to a move in either direction was that the precious metal had not sold off more after crude sharply fell almost $5 a barrel Monday afternoon.
Typically hedge funds and managed-futures funds are either long or short both crude and gold, said Gero. The question is whether these funds, in the event of a crude selloff, should also sell gold because they need the buying power. So, if the euro currency trades down, and crude sells off, then there is a gold dip. In Monday's case, gold didn't appear to follow the sharp drop of crude.
While there may be some upside resistance in the near-term after the recent rocket higher on the back of hefty stimulus plans from both the
European Central Bank
, the long-term prospects for gold look more optimistic, according to David Banister, chief investment strategist at TheMarketTrendForecast.com.
"It might be kind of boring here for a little while
as gold just kind of slow grinds its way higher," he said. "I think that most people would probably agree that the fundamentals are very good for
precious metals, from the perspective of negative real interest rates ... and increasing inflationary pressure in 2013."
The Fed's implementation of an open-ended QE3 has heightened discussions of inflation in the United States.
Bond investors on Monday bumped a key measure of inflation expectations to its highest level since 2006, according to
The Financial Times
as high as 2.73%, based on the difference between nominal and inflation-protected Treasury debt.
Though soaring inflation is still a speculative call, this indicator is expected to influence the gold price over the long-term.
Gold mining stocks were mixed Tuesday. Shares of
were shedding 1.3%, while
was posting gains of 4.1%.
Among other mining stocks,
was up 0.10%, as
pulled back 0.26%.
Gold ETFs were rising Tuesday as
SPDR Gold Trust
increased 0.67% and
iShares Gold Trust
-- Written by Joe Deaux in New York.