Gold settled higher on Tuesday, stabilizing after sharp losses seen in the previous session, as investors gauged Federal Reserve officials' comments about the outlook for easy monetary policy and the strength of the U.S. economy.
Federal Reserve Bank of New York President William Dudley said he was "more hopeful'' about the U.S. economy but also that he expected "very accommodative'' monetary policy to be in place "for a considerable period of time."
Chart: Precious Metals
Spot gold was last flat at $1,274 an ounce, after dropping 1.2 percent on Monday. Technical support was pegged at the recent low of $1,261, while a breach of the mid-October low of $1,251 would see the metal dropping further to June near-three-year lows of $1,180, ScotiaMocatta said in a note.
U.S. gold futures for December delivery settled $1.20 higher at $1,273.50 an ounce.
Gold had been boosted last week by comments from Janet Yellen, the Federal Reserve's chief in waiting, indicating she would continue the U.S. central bank's ultra-easy monetary policy. The Fed's $85 billion in monthly bond purchases has been have been a major support for gold prices in recent years as a hedge against inflation.
Investors were looking ahead to the release on Wednesday of minutes from the Fed's October meeting.
—By Reuters