Gold edged lower after choppy trade on Tuesday, on selling related to an option expiration and renewed fears about the euro zone debt crisis. Gold is still 4 percent higher for September following a sharp rally on hopes the central banks will keep the credit flowing by offering bullion-friendly stimulus.
"Gold is likely to continue to consolidate. Maybe a shoe drops over in Europe and that knocks gold prices which are overbought at these levels," said Phillip Streible, senior commodities broker at futures brokerage R.J. O'Brien. Spot gold inched down 0.2 percent to $1,760.25 an ounce by 3:06 pm EDT (1906 GMT). The metal hit a near-seven month high at $1,787.20 an ounce last week, but has since met technical resistance to break above this year's high at $1,790.30.
US COMEX gold futures for December delivery settled up $1.80 at $1,766.40 an ounce, with trading volume about 20 percent below its 250-day average, preliminary Reuters data showed. In other precious metals, silver edged down 0.7 percent to $33.71. Platinum gained 0.7 percent to $1,626.25 an ounce, while palladium was down 0.9 percent on the day at $634.97 an ounce.