SINGAPORE: Gold edged higher on Wednesday but remained in a tight range around $1,720 an ounce, with investors on the sidelines because Greece has yet to convince European leaders of its ability to stick to unpopular reforms needed to secure a bailout.
Euro zone finance ministers dropped plans on Tuesday for a special face-to-face meeting on Greece's new international bailout, saying political party chiefs in Athens had failed to provide the required commitment to reform.
"The postponement of the Greek cause seems to have taken some motivation out of the metal's trade," said a Singapore-based trader.
"Though people still think of precious metals as a good place to be given the current environment, the urgency to buy or sell depends on some kind of raw movement in the market and there hasn't been any in the past few days."
Spot gold edged up 0.3 percent to $1,724.04 an ounce by 0317 GMT. US gold gained 0.5 percent to $1,726.30.
Technical analysis suggested that spot gold could fall to $1,698 an ounce during the day, said Reuters market analyst Wang Tao.
Hedge fund manager and long-time gold bull John Paulson cut his gold ETF bullion holdings by about $600 million in the fourth quarter, a second straight reduction that was likely driven by client redemption needs as he remained upbeat on the metal.
Paulson's selling in the SPDR Gold Trust was more than offset by buying by other investors, reflecting long-term confidence in gold. "In the long run, the euro zone debt crisis is still supportive of gold," said Hou Xinqiang, an analyst at Jinrui Futures based in the southern Chinese city of Shenzhen.
"In the short term, gold is due to stay in consolidation mode, with the lower end of the range at $1,700 presenting a buying opportunity." Spot platinum rebounded after hitting a one-week low of $1,615.98 in the previous session, rising 0.7 percent to $1,635.24.
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