Gold inches up, uncertainty over US fiscal talks weighs
Gold edged up on Thursday as uncertainty around U.S. budget talks kept investors nervous while Asia's physical buying interest failed to lift prices substantially from a more than three-month low struck earlier this week.
Talks in Washington to avert a fiscal crisis stalled as a deadline approaches for the world's top economy to avoid $600 billion worth of tax hikes and spending cuts, dubbed the "fiscal cliff", that could tip it back into recession.
Earlier this week, gold slipped to its lowest since the end of August, and has languished near that level since, with investors hesitant to jump in as the U.S. talks grind on.
The earlier sharp drop triggered some interest from Asia's bullion buyers, lending support to the market, but the buying was not enough to lift prices, dealers said.
"There is decent Asian physical buying but it's not enough to send prices recovering," said a Tokyo-based trader.
Spot gold edged up $1.50 to $1,668.06 an ounce by 0302 GMT, hovering above a key support at the 200-day moving average of $1,660.82.
U.S. gold inched up 0.1 percent to $1,669.40.
Spot gold may consolidate in the range of $1,660 and $1,688 an ounce for one more trading session before dropping towards $1,631, said Reuters market analyst Wang Tao.
The weaker-than-expected physical demand in Asia will remain a hurdle to gold's ascent, analysts said.
"Without a significant pick-up in physical demand, gold will struggle to
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