Gold fell on Tuesday for a second session as US fiscal worries overshadowed progress in easing Greece's debt burden, and a key option expiration held bullion prices in a tight range. Safe-haven demand for gold faded after euro zone finance ministers and the International Monetary Fund agreed to reduce Greece's debt, paving the way for the release of aid loans.
Still, open interest in US gold futures remained near a 2012 high following Friday's price rally. Analysts said these new bullish positions could help extend the rally. Spot gold was down 0.4 percent at $1,741.86 an ounce by 2:44 pm EST (1944 GMT), below a five-week high of $1,754.10 reached on Friday. US COMEX gold futures for December delivery settled down $7.30 at $1,742.30.
Trading volume was more than 50 percent above the 250-day average largely due to a combination of option expiry and contract rollover ahead of first-notice day Friday. Open interest eased but stayed near a 2012 high at 493,245 lots reached Friday when gold jumped 1.5 percent. Among other precious metals, silver was down 0.4 percent at $33.98 an ounce. Platinum was unchanged from Monday's last trade at $1,608.74 an ounce, while palladium climbed 0.7 percent to $665.25 an ounce.