NEW YORK/LONDON (Reuters) - Gold slipped in late dealings on Wednesday, as the euro edged down against the dollar, but it spent the session seesawing around unchanged levels in a narrow range and little volume as most fund and banks’ books were shelved for the year.
Spot gold was bid at $1,383.19 an ounce by 3:50 EST (2050 GMT) against $1,385.30 late in New York on Tuesday. U.S. gold futures for February delivery finished $1.40 lower, at $1,387.40 an ounce on the COMEX division of the NYMEX.
Simmering concerns over euro zone debt levels after recent warnings from credit rating agencies on some euro zone economies have supported safe-haven demand for the precious metal, and prices were also underpinned by the IMF’s announcement of the completion of the massive gold reserve sale it began a year ago.
Analysts said they expect gold to hold within its $1,360 to $1,400 an ounce range for at least the rest of the year.
“People have found somewhat of a comfort level here. There is still big resistance at $1,400 and support around $1,350 to $1,360. Until we get a new impetus to move it one way or the other, I think it could hang around in this range for the rest of the year,” said Donald Selkin, chief market strategist at National Securities Corp in New York.
Looking into 2011, he added that gold has a tendency to fall or stick within a sideways range for the first quarter of the year, and to make most of its upmove in the second half.
But in thin pre-Christmas trade, gold has largely moved back into step with its traditional inverse relationship with the dollar, which has been choppy this year as both assets have benefited from financial instability in the euro zone.
The dollar retreated after data from the U.S. Commerce Department showed gross domestic product growth was revised up to an annualized rate of 2.6 percent from 2.5 percent in the third quarter.
The euro’s late decline against the dollar ultimately pushed gold down heading into the close. The euro reversed early gains sparked by a report that China was ready to buy significant amounts of Portuguese sovereign debt.
The IMF meanwhile announced it had completed its planned sale of 403.3 tonnes of bullion. Buyers included India, Mauritius, Sri Lanka and Bangladesh. Swiss bank UBS said in a note that without IMF selling, it expects official sector buying to accelerate next year.
“A sharp increase in dollar reserves in recent years has led to gold’s share in total reserves declining at many central banks, such as the Reserve Bank of India, prompting gold purchases as a means of rebalancing gold’s share in total reserves,” said Natalie Dempster, director of government affairs at the World Gold Council.
“Other central banks bought their own local mine production this year or acquired gold on the open market for the same reason, dollar diversification or due to rising risks on other commonly held reserve assets, such as European sovereign debt.”
Elsewhere, holdings of the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, eased to 1,298.029 tonnes by December 21 from 1,298.940 tonnes on December 17, data from the fund showed.
Among other precious metals, silver was bid at $29.3850 an ounce against $29.32, platinum was at $1,730.90 an ounce against $1,719.24, while palladium was at $751.47 against $751.75.
Additional reporting by Melanie Burton in London; Editing by Lisa Shumaker