Gold Down After Day of Pro Eurozone Developments

Gold settled slightly lower Wednesday after a string of European developments during the trading session boosted investor hope that the continent's sovereign debt crisis is finally getting the attention it requires.

The most recent development came in an emergency teleconference with the leaders of Greece, France and Germany who said Greece will remain in the eurozone and that its efforts to collect taxes and shrink its government would ensure the receipt of the next big tranche of aid.

Earlier in the day, the lower house of the Italian Parliament easily passed a $74 billion package of spending cuts and tax hikes -- structured as a vote of confidence in Premier Silvio Berlusconi -- to cut the country's debt. Currently that debt is 120 percent of its gross domestic product. The move comes one day after the nation had to pay a record high interest rate to sell five-year notes.

The head of the European Commission, the administrative arm of the European Union, said Wednesday the 17-nation bloc will shortly offer proposals for common euro bonds, something Germany has opposed.

Meanwhile in China, Premier Wen Jiabao said China was willing to buy European debt securities, but European leaders must also recognize China's status as a market economy, Dow Jones reported. Such an action would benefit Chinese companies currently involved in trade disputes and under World Trade Organization rules once China becomes part of the WTO.

The day's developments gave a lift to stocks on both sides of the Atlantic and weighed on precious metals.

In New York futures trading, gold settled down $3.60 at $1,826.50, while gold for immediate delivery was off $15.56 to $1,821.61.

Silver for December delivery closed down 68 cents at $40.53, while silver for immediate delivery was off 64 cents to $40.49.

In Europe, the DAX rose 3.36 percent and in the U.S. all 10 key sectors of the S&P rose.