Investing.com - Investing.com - Gold futures edged higher during European morning trade on Thursday, holding above a key technical support level, as investors continued to monitor negotiations among U.S. lawmakers to avoid the looming "fiscal cliff" crisis.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery traded at USD1,671.55 a troy ounce during European morning trade, up 0.25% on the day.
Prices held in a tight trading range between USD1,666.15 a troy ounce, the daily low and a session high of USD1,672.45 a troy ounce. Gold futures fell to USD1,662.35 a troy ounce on Tuesday, the lowest level since August 31.
Gold prices were likely to find short-term support at USD1,662.35 a troy ounce, Tuesday's low and resistance at USD1,700.45, the high from December 17.
Market players continued to monitor developments surrounding the fiscal cliff in the U.S., approximately USD600 billion in automatic tax hikes and spending cuts due to come into effect on January 1, unless a divided Congress and the White House can work out a compromise in the two weeks left before the deadline.
Doubts over whether a deal will be reached ahead of the year-end deadline intensified Wednesday after a spokesman for President Barack Obama said that the White House would veto a tax and spending proposal presented by House Speaker John Boehner.
Some technical buying provided some support, after prices held above their 200-day moving average close to the USD1,660-level. 200-day moving averages are considered key trading levels for many investors, often serving as a floor for prices after big declines.
The precious metal declined to a four-month low of USD1,662.35 a troy ounce earlier in the week, as large institutional investors and hedge funds locked in gains ahead of the end of the year.
Elsewhere on the Comex, silver for March delivery rose 0.15% to trade at USD31.16 a troy ounce, while copper for March delivery fell 0.5% to trade at USD3.588 a pound.
Trading was expected to remain subdued over the next two weeks, with year-end positioning driving flows and as holidays in many countries limit activity. Lower-than-usual volumes could spark volatile trading, resulting in rapid changes in metal prices during the final weeks of the year.
Investing.com - Investing.com offers an extensive set of professional tools for the Forex, Commodities, Futures and the Stock Market including real-time data streaming, a comprehensive economic calendar, as well as financial news and technical & fundamental analysis by in-house experts.
Read more News on Investing.com or Follow us on Twitter at @ Newsinvesting