Spot gold held to a slight loss on Wednesday in a global market sell-off, but losses were limited as investors sought safety amid doubts economic reforms in Italy and fears that eurozone leaders may be too late to resolve the region's debt crisis.
Bullion fell around 0.5 percent as Wall Street dived nearly 4 percent and the US dollar surged, after Italian borrowing costs rose to a breaking point as Prime Minister Silvio Berlusconi's insistence on elections instead of an interim government opened the way to prolonged political and economic turmoil.
Gold was still more than 1 percent higher over the last 3 sessions, driven by safe-haven bids amid concerns about the viability of the euro and the 17-nation currency bloc. Gold dropped 0.6 percent to $1,773.99 an ounce by 2:32 pm EST (1932 GMT). On Tuesday, it hit an intraday high of $1,802.60 - its strongest since late September.
US gold futures for December delivery settled down $7.60 at $1,791.60 an ounce. Trading volume exceeded its 30-day norm during Wednesday's volatile session, breaking a recent trend of slower turnover. Silver fell 2.8 percent at $33.95 an ounce. Holdings of the largest gold-backed exchange-traded-fund (ETF), New York's SPDR Gold Trust, gained nearly 1 percent from Monday to Tuesday, while those of the largest silver-backed ETF, New York's iShares Silver Trust, dipped 0.12 percent for the same period. In platinum group metals, platinum fell 2.1 percent to $1,623.24 an ounce and palladium dropped 3.4 percent to $644.97.