Gold steadied near seven-week highs on Wednesday as equity markets surrendered earlier gains to turn lower and the dollar extended losses versus a basket of currencies.
Spot gold was little changed at $1,231.47 an ounce, recovering from a daily low of $1,224.73. Overnight it hit a peak of $1,238.20, its highest since Oct. 23, having risen more than 2 percent on Tuesday as the dollar and stocks fell.
The metal quickly recovered early losses on Wednesday as a tentative recovery in equity markets lost traction. Gold has suffered this year from a move by investors back into stock markets, away from assets seen as safer, such as bullion.
"One of the reasons we're bullish on gold for next year is this idea that equity markets will run out of steam, and there will be some investor movement back into gold," Capital Economics analyst Caroline Bain said. "We're seeing that temporarily at the moment."