Gold prices closed slightly higher Tuesday as U.S. dollar weakened February gold closed at $774, up $4.90 on the session. Prices reached as high as $780.70 in intraday trading.
The greenback tested a 10-day low versus the euro and also moved lower versus most other majors. Gold generally moves opposite the dollar because of the precious metal's hedge appeal.
Gold's hedge appeal was minimized as crude oil prices turned lower on Tuesday, giving back some of the gains from yesterday. Light sweet crude for January delivery finished at $42.07, down $1.64 for the session.
Gold added to a $17.10 rally from Monday and erased more of last week's decline. The precious metal fell $67 last week close, its first weekly decline in five weeks. The metal hit its lowest level since Nov. 20 in intraday trading Friday.
On the economic front, a National Association of Realtors report showed that the pending home sales index fell 0.7 percent to 88.9 in October from an upwardly revised reading of 89.5 in September. Economists had been expecting the index to fall by a more substantial 3.0 percent.
Investors also considered a tentative deal to bail out U.S. automakers that was was first outlined Monday evening by House Speaker Nancy Pelosi. It will shift $15 billion from a fund set up to help the Detroit businesses retool to build more environmentally friendly vehicles for more general uses - keeping the "Big 3" afloat through early next year.
