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Gold steadied with little overall change on Wednesday, after dropping in the previous session to a 3-1/2 month low, as US legislators appeared far from reaching deal to avert tax hikes and spending cuts which could threaten to send the economy back to a recession. Spot gold inched up a penny at $1,669.55 an ounce by 3:39 pm EST (2039 GMT).

US COMEX gold futures for February settled down $3 cents an ounce to $1,667.70, with trading volume about 20 percent below its 30-day average, preliminary Reuters data showed. Open interest, a gauge of market activity, surprisingly climbed 4,000 lots to 435,742 contracts on Tuesday even though bullion prices dropped 2 percent, suggesting newly created bearish bets are weighing on gold prices, traders said. Silver dropped 1.5 percent to $31.16 an ounce. Among other precious metals, platinum inched down 0.2 percent to $1,587.40 an ounce and palladium was up 0.8 percent at $692 per ounce.

Copyright Reuters, 2012


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