Gold fell 1.5 percent on Wednesday, its biggest one-day drop in nearly a month, as deflation worries related to a US fiscal crisis and debt-stricken Greece triggered a heavy bout of stop-loss orders from momentum-driven fund investors. Spot gold hit a low of $1,705.64 an ounce, its lowest price since November 16. Later, it rebounded off its lows and traded at $1,718.60, down 1.3 percent on the day, by 2:49 pm EST (1949 GMT).
US COMEX December gold futures settled down $25.80 at $1,716.50. Trading volume was extremely heavy at nearly 440,000 lots, more than doubled its 250-day average, preliminary Reuters data showed, partly boosted by the December-February contract rollover. It is on track to finish among the top three daily turnovers in 2012.
Gold's sell-off sent prices near recent lows between $1,703 and $1,705. Bullion could slide further due to a lack of chart support if it breaks below that key support area, analysts said. Among other precious metals, silver fell in line with gold but also rebounded off a one-week low at $32.89. It was last traded 1 percent lower at $33.68 an ounce. Spot platinum was down 0.4 percent at $1,601.90 an ounce, while spot palladium climbed 0.8 percent to $670.50 an ounce.
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