Gold prices eased slightly in Asia on Wednesday as investors awaited fresh cues on European growth prospects and geopolitical tensions.
On the Comex division of the New York Mercantile Exchange, Gold futures for December delivery traded at $1,310.00 a troy ounce, down 0.05%, after hitting an overnight session low of $1,306.90 and off a high of $1,318.90.
Overnight, gold prices rose albeit in choppy trading after data out of Germany suggested the Russia-Ukraine conflict may be watering down global recovery, which bolstered the precious metal's safe-haven appeal.
The ZEW Centre for Economic Research reported that its index of German economic sentiment dropped to 8.6 this month, down from 27.1 in July. It was the weakest reading in 20 months and came in well below economists’ forecasts of 18.2, which sent investors snapping up safe-harbor gold positions.
The current conditions index deteriorated to a seven-month low of 44.3 from 61.8 in July, worse than expectations for a decline to 55.5.
Geopolitical tensions in Eastern Europe are apparently taking their toll on the German economy.
Recent economic reports have indicated that sanctions slapped on Russia due to its alleged meddling in the Ukraine conflict are dragging on the German economy, Europe's largest and Russia's largest trading partner in Europe.
The report also indicated that economic growth in Germany will be weaker than expected in 2014.
Russian has said it is wrapping up military exercises on its border with Ukraine and has added the country is working with the International Red Cross to send humanitarian aid to Ukraine.
Still, uncertainty over whether the ceasefire can last took fueled demand for gold, as concerns have grown that Russian trucks shipping aid into Ukraine may be used as a cover to smuggle in troops for combat missions.
Silver for September delivery was up 0.17% at $19.938 a troy ounce. Copper futures for September delivery were flat at $3.150 a pound.