Gold rebounded from intraday lows on Wednesday after the U.S. Congress finally passed a bill that avoids tax hikes and spending cuts worth $600 billion, but the temporary reprieve drew muted reaction from bullion investors in Asia.
Even though the world's biggest economy will no longer go over the "fiscal cliff", other bruising budget battles lie ahead in the next two months.
Gold added $7.01 an ounce to $1,681.55 by 0649 GMT after hitting a low around $1,670. Gold ended up around 7 percent in 2012, the 12th straight year of gains for the precious metal in what is one of the longest bull runs ever for a commodity.
Gold struck a record of around $1,920 in September 2011, when a worsening debt crisis in Europe sparked a buying rush.
"Right now nobody really seems to be doing very much. Investors want to see how other markets react, equity markets in particular," said Nick Trevethan, senior metals
strategist at ANZ in Singapore.
"If we start to see a bit of a gain in equity markets, gold will probably follow suit. I suspect investors in this part of the world want to see how Europe and U.S. investors react," he added.
US gold for February rose $6.50 an ounce to $1,682.30 an ounce Stocks hit a five-month high in Asia and the dollar fell as a last-minute deal ended the U.S. fiscal crisis which threatened to send the economy back into recession and roil world financial
"In the first quarter of 2013, economic uncertainty on the outcome of the U.S. fiscal cliff, among other factors, warrants a defensive posture," UBS said in its 2013 outlook.
"We therefore think gold and platinum are an outright buy at present levels as both metals have very low supply elasticity and are key beneficiaries of loose monetary policy," the bank added.
"In the case of gold, we still target the level of $1,950 an ounce over the next three months, while we expect platinum to move to $1,800 an ounce over the same period."
Platinum ended 2012 up around 10 percent, mainly driven by concerns about widespread miner strikes in top producer South Africa. Platinum is used as an auto
Gold is traditionally an inflation hedge and a market that investors rush to in times of trouble, but the metal has lately behaved more like an industrial commodity - rising and falling with the stock market and sometimes even following the dollar.
Since many investors