Gold rose on Wednesday to reverse earlier losses, with the US dollar edging away from 14-year highs touched the day before. Spot gold was up 0.4 percent at $1,135.83 an ounce by 0621 GMT. It fell 0.6 percent in the previous session. US gold futures were also 0.4-percent higher, at $1,138.10 per ounce. "We are seeing quite a lot of volatility. It is driven by the direction of the US dollar. (Gold) is just marking time before it makes its next big move. It is in a very very strong down channel," said Jeffrey Halley, senior market analyst at OANDA.
"If we see a break of $1,100, a psychological level, we will see more liquidations towards Christmas for sure and it could be an ugly move downwards." "Any pullback in the greenback may trigger a scramble into gold," HSBC analyst James Steel said in a note. "Gold may near $1,100 per ounce but we do not think the market will go below that level. If it does break $1,100 per ounce, we would expect bargain-hunters and price sensitive buyers to increase purchases."