NEW YORK ( TheStreet ) -- Gold prices were trading sideways Wednesday on light technical trading, an indication the yellow metal may have to wait until 2011 to see more momentum.

Gold for February delivery settled $1.40 lower to $1,387.40 an ounce at the Comex division of the New York Mercantile Exchange. The gold price traded as high as $1,391.70 and as low as $1,385.60 during Wednesday's session. The spot gold price was adding 50 cents, according to Kitco's gold index.

The U.S. dollar index was flat at $80.73 while the euro was down 0.08% to $1.30 vs. the dollar. China announced it would buy €4-5 billion in Portuguese bonds, according to reports. China in recent years had been selling euros for dollars but changed its tune Tuesday when the country announced it would support the European Union's fight against sovereign debt.

Gold prices will probably remain stagnant for the rest of the week as trading gradually thins out ahead of the long holiday weekend.

"Many times holiday markets are choppy," says George Kleinman, president of Commodity Resource. Kleinman is still bullish on gold prices over the long term and thinks prices could hit $1,600 in 2011. For now though Kleinman says gold "has been in a downtrend that ended last week and the short term trend will probably chop around a bit with an upward bias."

For his part, Kleinman is sitting out the last two weeks of the year, preferring to eschew trading as volume deteriorates. "I don't see much happening in the next week or so" he says.

Gold prices got some support from news that the International Monetary Fund has completed the sale of 403 tons of gold originally announced in September 2009. Many analysts had been worried that a large gold sale would lead to an oversupply in the market and lower prices.

Gold prices weathered the storm well, helped by ballooning investment demand. During the same time frame, the SPDR Gold Shares ( GLD), the largest gold exchange-traded fund, added 236.19 tons, more than half of what the IMF was selling.

"The fact that the IMF could sell over 400 tons of gold in such a short space of time, with no market disruption, demonstrates how deep and liquid the gold market is," says Natalie Dempster, director of Government Affairs for the World Gold Council, the sponsor of the GLD. "It also reflects the fact that the majority of gold sales were conducted off market with central banks."

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