Gold edges up, holds near 3-week high on US fiscal woes
Gold added $1.88 an ounce to $1,732.79 by 0239 GMT, holding near a 3-week high around $1,738 struck on Friday and hovering well above a 2-month low around $1,672 hit last week.
Worries about the fiscal cliff continue to drive sentiment. Obama will speak on Wednesday on the matter, and we are seeing some signs of compromise between Democrats and Republicans, said Nick Trevethan, senior metals strategist at ANZ in Singapore.
That may take some of the steam out of the upside story for gold, but the prospect of negative real interest rates and longer-term inflationary risks remain positives for bullion.
Uncertainty over U.S. fiscal woes weighed on shares in Asia but euro held above a two-month low after Greece's ruling coalition secured enough votes in parliament to approve the 2013 budget law. A rebound in the euro makes dollar-priced gold less expensive.
We continue to see upside potential in this market with $1,750 the next target, said Trevethan.
Above there, gold is likely to struggle with very heavy
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