“Gold prices steadied near $1,690 an ounce on Thursday, as buyers remained on the sidelines after the European Central Bank left rates unchanged as expected, and on uncertainty over negotiations to avert a U.S. fiscal crisis.
Confidence in gold has ebbed this month after it failed to push above $1,730 in November. A weak technical picture helped push prices to a one-month low on Wednesday, taking them below their 100-day moving average for the first time since August.
Spot gold was at $1,686 an ounce, down 0.4 percent, while U.S. gold futures were down 0.1 percent an ounce at $1,692 per ounce.
The euro was little changed against the dollar on Thursday after the European Central Bank kept interest rates on hold at 0.75 percent as expected by most market players.
Buyers are awaiting direction from non-farm payrolls data on Friday, and next week's Federal Reserve policy meeting, as well as clearer signals on how the United States will deal with negotiations over its upcoming "fiscal cliff."
That refers to the possibility that a $600 billion package of tax hikes and spending cuts due to kick in in the New Year could push the world's biggest economy back into recession.
The ECB is wary of taking any action that could see the euro zone's governments soft-pedal budget-consolidation efforts. That puts the onus on Spain to ask for a full bailout before the ECB can intervene and buy Spanish sovereign debt.
Euro-Priced Gold Slips
Gold priced in euros slipped into oversold territory after falling nearly 2 percent this week, posting its biggest one-day decline in six months on Wednesday and touching its lowest since mid-July at 1,288.85 euros an ounce.
Its 14-day relative strength index stood at 28.9 on Thursday, with any reading less than 30 considered to signal oversold conditions.
Investors' appetite for physical gold and physically backed investment products remained sharp, with holdings of the largest gold exchange-traded fund, New York's SPDR Gold Trust, at a record high.
Demand in India, historically the world's biggest buyer of gold, was also firm as prices fell to their lowest in a month, weighed by a stronger rupee and a decline in spot prices.
From a chart perspective, further losses in gold could take prices down to support at its November low at $1,672.50 an ounce, and its 200-day moving average at $1,660.
Among other precious metals, silver was down 0.7 percent at $32 an ounce.
Silver has lost some ground to gold so far this month, with the gold/silver ratio, which measures the number of silver ounces needed to buy an ounce of gold, edging further from last week's near eight-month low at 50.42 to 51.6 on Thursday.
Spot platinum was up 0.2 percent at $1,579 an ounce, while spot palladium was up 0.2 percent at $684 an ounce.”