Gold Prices Move Slightly Higher

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"Moderate buying continues, but prices still trapped in a tight range."

Gold prices were clawing their way higher Wednesday as moderate buying continued, but prices were still trapped in a tight range.

Gold for February delivery was adding $2.70 to $1,370.90 an ounce at the Comex division of the New York Mercantile Exchange. The gold price Wednesday has traded as high as $1,378.90 and as low as $1,365.50. The spot gold price was adding more than $3, according to Kitco's gold index.

The U.S. dollar index was drifting lower down 0.53% to $78.57 while the euro was rallying 0.82% to $1.34 vs. the dollar.

Gold prices seem to be looking for some kind of catalyst to break them out of their range of $1,320-$1,420 an ounce. Traders are nibbling at gold after the metal stemmed its Friday selloff, but any big positions are being kept on the sidelines until an upward trend can be confirmed. Any run-up, as was seen in early morning trading, can also provide an opportunity for investors to take profits.

The popular gold exchange-traded fund, SPDR Gold Shares, shed almost three tons on Tuesday as light profit-taking continued while iShares Gold Trust has not adjusted its tonnage since Dec. 23.

Scott Redler, chief strategic officer for T3 Live, says that gold has lost its identity a bit and it's no longer a fear trade.

"I think gold could regain this identity as we go into the second quarter" as debt issues in U.S. states and controversy on raising the debt ceiling put money issues in the foreground.

"Long term, as long as the Fed continues to pump money into the system [and] there are problems in the eurozone," argues Phil Streible, senior market strategist at Lind-Waldock, "I think gold will continue to catch a bid."

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