Gold Prices Give Up Gains (Update 1)

Updated from 9:31 a.m. EDT with settlement prices and mining stocks

NEW YORK ( TheStreet) -- Gold prices relinquished gains from earlier on Wednesday despite Germany's Federal Constitutional Court ruling in favor of the European Stability bailout fund.

Gold for December delivery slipped $1.20 to settle $1,733.70 an ounce at the Comex division of the New York Mercantile Exchange. The gold price traded as high as $1,749.50 and as low as $1,727.30 an ounce, while the spot price was down $1, according to Kitco's gold index.

The yellow metal posted early morning gains after Germany revealed it would commit to aiding the eurozone. But a recent rally in gold, coupled with the Federal Reserve's meeting announcement to come Thursday, reversed the rise.

"Certainly the German decision has helped underpin risk sentiment," said James Moore, an analyst at FastMarkets.com. "The moves that we've seen today are in reaction to the German news and the fact that German politicians are not going to stand in the way of the ESM in providing stability to the eurozone."

"The market feels like it will be swung around on fresh news items but mostly will experience some consolidation of recent gains," George Gero, precious metals strategist at RBC Capital Markets, wrote in a Wednesday afternoon note.

Silver prices for December delivery settled down 27 cents at $33.29 an ounce, while the U.S. dollar index was falling 0.23% to $79.71.

German's approval of the bailout fund was also met with conditions that said the country's liability on the fund should not rise beyond €190 billion without the parliament's approval.

Though gold was moving higher Wednesday morning, markets likely are waiting for Fed Chairman Ben Bernanke's announcement on Thursday about the central bank's monetary policy moving forward, Moore said.

Bernanke said two weeks ago at the Jackson Hole, Wyo., economic summit that he was gravely concerned about unemployment, and that quantitative easing could be near.

Fed watchers are expecting the central bank to announce a new asset purchase program and possibly extend to 2015 its promise to keep interest rates at historic lows.

The monthly unemployment rate ticked lower last Friday to 8.1% in August, down from 8.3% in July, but the number of jobs added in the month were lower than expected.

Platinum prices have continued to surge on questions about supply, which has been rocked in the past month by sweeping strikes by South African miners.

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