Gold Hovers in Tight Range ahead of Key Eurozone Meeting

Gold prices barely moved Tuesday as investors awaited the outcome of a critical eurozone meeting expected to approve a boost to the continent's bailout fund and OK the next tranche of aid to debt-choked Greece.

Finance ministers from the 17-member eurozone gathered in Brussels to vote on using the European Financial Stability Fund to guarantee the sovereign debt of the monetary union's weakest members, a group that now includes Italy.

The hope is that such a move will stop bond buyers from demanding record high yields to loan to those nations, giving a lift to stocks, the euro and gold.

In Asia, stocks hovered in a tight band. The Nikkei 225 rose 2.3 percent, while the Hang Seng gained 1.2 percent.

European stocks were also on tenterhooks. Germany's DAX was up 0.19 percent and France's CAC 40 rising 0.9 percent. Britain's FTSE 100 slipped 0.28 percent.

In the U.S., stock futures were mixed in a narrow range. The Dow Jones Industrial Average was up 0.1 percent, the Nasdaq 100 was off 0.3 percent and the S&P 500 edged 0.15 percent higher.

The dollar fell against a basket of major currencies, including the euro, by 0.44 percent to 79.01. Japan's yen, widely seen as a safe-haven currency, declined against both the dollar and the euro.

Gold, now in its 10th year of a bull market, is being supported by short covering, yearend profit taking and rising crude oil prices, with Brent blend topping $109 per 42-gallon barrel early Tuesday. Since Jan. 1, gold has risen from $1,365.79 per troy ounce to today's $1,700 range, a nearly 25 percent gain. The yellow metal also continues to find price support from robust investor demand, as measured by the growing tonnage of bullion held by gold exchange-traded products.

But physical demand in India, the world's largest gold buyer, has begun to wane, in part because of the plunging value of the rupee. For Indians the price of gold this year has soared 21 percent.

Imports (of gold) will be down 20 to 25 percent in the last (December) quarter and it will have a negative impact on global prices, Prithviraj Kothari, president of a key trade body, the Bombay Bullion Association, told Reuters.

Gold for February delivery, the most actively traded contract on the Comex, rose $3.80 to $1,718.30, while spot gold added $3.65 $1,715.22.

Silver for December delivery fell 15 cents to $32.01, while spot silver rose 16 cents to $32.07.