Forexpros - Bargain hunters snapped up nicely price gold positions in Asian trading on Wednesday after the yellow metal hit 1-month lows stemming from fiscal uncertainties in the U.S., which dampened demand for risk-on assets. On the Comex division of the New York Mercantile Exchange, gold futures for February delivery were up 0.33% at USD1,701.45 a troy ounce, up from a session low of USD1,696.45 and down from a high of USD1,700.95 a troy ounce. Gold futures were likely to test support at USD1,683.55 a troy ounce, the low of Nov. 6, and resistance at USD1,724.45, Monday's high. Technical selling sent the yellow metal plunging in earlier sessions as did fears the U.S. could slide into a recession next year due to a political impasse concerning fiscal matters. Congressional Republicans and the Democratically controlled White House earlier remained at odds over tax and spending issues. Both sides of the U.S. political aisle must agree on a fiscal framework for next year, or a series of tax cuts will expire at the same time automatic cuts to government spending kick in, a combination known as a fiscal cliff that could tip the country into recession next year if left unresolved by U.S. policymakers. Taxes serve as hurdle, with the White House insisting tax rates must rise for wealthy Americans, a measure opposed by Republicans who favor extending tax breaks for everyone but cutting deductions to free up revenue. President Barack Obama earlier insisted there would be no deal unless Republicans agree to hike tax rates on top U.S. earners Uncertainty over concerns that both political parties may be unable to strike a deal or will kick the can down the road by punting on deadlines continued to fuel uncertainty and chase investors towards the safety of the dollar earlier. Gold and the dollar normally trade inversely from one another, though gold rebounded after investors viewed the yellow metal as oversold by Asian trading on Wednesday, especially as hopes continued to build that the European debt crisis may be showing signs of abating. Greece kicked off a EUR10 billion buyback of government debt maturing between 2023 and 2042, a requirement for Athens to tap bailout packages totaling EUR44 billion. Eurozone officials expressed confidence the country's debt repurchase program will be successful, which sent the euro gaining against the greenback, often a catalyst that sparks demand for gold. Elsewhere on the Comex, silver for March delivery was up 0.73% and trading at USD33.048 a troy ounce, while copper for March delivery was down 0.10% and trading at USD3.654 a pound.

Source