Gold Price Steady as Physical Demand Offsets Euro Worries

Gold hardly moved Tuesday with prices stretched between stronger physical demand from Asia and eurozone worries, including bank weakness and more sovereign debt downgrades.

Traders may also have been recouping after an exhausting day Monday, when precious metals prices plunged.

Fitch Ratings and Moody's Investors Service warned Monday that last week's summit did little to ease concerns about the credit worthiness of eurozone members.

In addition, Moody's put eight Spanish banks on review for a downgrade, and Germany's Commerzbank continued talking with Berlin about state aid as it struggled with recapitalization strains.

Meanwhile, Asian physical demand rose.

Flows to India yesterday were well above average, and the highest since Oct. 20, UBS analyst Edel Tully said in a note. Gold priced in rupees is now 4.2 percent below the record highs of late November, and this has clearly proved enough of an incentive for physical buyers in India to jump in.

Gold faced little resistance from the dollar, which barely moved.

Stock market action was mixed, with Asian bourses mostly lower, European equity indexes modestly higher and U.S. futures indicating a positive open.

Gold for February delivery slipped 70 cents to $1,667.50, while spot gold rose $1.47 to $1,664.78.

Silver for March delivery added 39 cents to $31.40, while spot silver added 28 cents to $31.37.