Gold held steady below $1,600 on Friday, after the euro zone leaders reached an agreement on a Greece bailout plan, but prices are expected to be rangebound as investors keep an eye on the progress made in U.S. national debt talks.
On the other side of the Atlantic, efforts to craft a $3 trillion deficit-reduction deal gained traction as the White House and congressional leaders scrambled to sort through competing options and stave off a devastating default.
"Gold is consolidating right now after rallying in the last two weeks as we are seeing signs that the debt problem is being solved little by little in Greece," said Dick Poon, manager of precious metals in Heraeus, based in Hong Kong.
"A $10, $20 correction will be welcomed by investors."
Technical analysis indicated that gold would fall into a range of $1,565 and $1,576 in the short term, said Reuters market analyst Wang Tao.
Although gold might face short-term headwind, its long-term appeal remains, as the trouble with fiscal conditions in euro zone nations as well as the United States may continue to drive investors to seek safety in bullion.
"U.S debt talks are only of mild interest to me," said a Singapore-based trader, "the more important thing is the long-term implication — U.S. government bonds used to be called 'risk-free asset' and now we are seeing that concept fade away."
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