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Gold fell back from a one-week high on Tuesday and remained vulnerable to further losses on uncertainty over the U.S. stimulus outlook and lacklustre physical demand.

Spot gold fell 0.5 percent to $1,246.61 an ounce at 1257 GMT. It hit $1,256.49 in early trade, its highest since Nov. 20.

U.S. gold futures were up 0.4 percent to $1,246.20 an ounce.

On Monday, spot gold fell to a 4-1/2-month low near $1,225 an ounce after a deal halting Iran’s most sensitive nuclear activities drove oil prices lower and lifted the dollar and equities.

But prices recovered to gain nearly 1 percent as investors covered short positions, while options-related buying also helped the metal higher.

Gold fell below $1,300 an ounce on Nov. 7 after a series of positive U.S. economic data raised speculation that the Federal Reserve would taper its economic stimulus before the end of the year.

Traders expect prices to be pressured until there is a definitive timeline on when the U.S. Federal Reserve will begin cutting its quantitative easing programme.

“No significant data will be published this week and gold will be more or less treading water and will be driven probably by the U.S. dollar and ongoing discussions on when the Fed will start tapering,” Commerzbank analyst Daniel Briesemann said.

Gold prices have lost about a quarter of their value this year on fears the Fed would begin tapering the $85 billion in monthly bond purchases that have burnished bullion’s appeal as a hedge against inflation.

The next major data release is on Dec. 6, when nonfarm payroll data is scheduled. The Fed’s next policy meeting will be held on Dec. 17-18.

The dollar index was down 0.2 percent as U.S. 10-year Treasury yields slipped after data on Monday showed contracts to buy previously owned U.S. homes hit a 10-month low in October.

“Given the market is still positioned short, we can continue to expect bouts of volatility,” ANZ analysts said in a note.

“The overnight move does little to change our view that the market will continue to trade in a weak fashion while physical demand remains lacking.”

LOW DEMAND

Physical demand, which usually provides a floor to prices, has failed to pick up the way it did earlier this year when prices fell over $200 an ounce in two days.

Buying picked up when prices fell below $1,230 on Monday but quickly died down as these shot up again, dealers said.

Premiums in Shanghai for 99.99 percent purity bars fell to about $8 an ounce on Tuesday from $13 in the previous session.

Outflows from gold funds continued, with SPDR Gold Trust , the world’s largest gold-backed exchange-traded fund, losing 3.30 tonnes on Monday. Outflows from the ETF, about 450 tonnes so far this year, have played a big role in denting prices.

Silver extended earlier losses, falling 1.5 percent at $19.99 an ounce, having touched its lowest since mid-August at $19.54 in the previous session.

Spot platinum lost 0.5 percent to $1,376.74 an ounce, while spot palladium dropped 0.4 percent to $715.97 an ounce. (Additional reporting by A. Ananthalakshmi in Singapore; editing by James Jukwey)

Gold settled near its highest level in a week in Asian trade on Tuesday, supported by purchases to settle short positions in the previous session, but it still seems likely to fall with the survival of the actual demand sluggish amid uncertainty surrounding the timing to reduce stimulus measures in the United States .

The price of gold for sale for cash of $ 1252.26 an ounce at 0445 GMT, after the record in early trading to $ 1256.49 , the highest level since the twentieth of November.

Gold prices fell for the sale of cash on Monday to its lowest level in four and a half months near 1225 dollars an ounce, before recovering to earn about 1 percent subsidized purchases to settle the city centers and the processes associated with purchase contracts optional .

The decline in the precious metal for $ 1,300 three weeks ago, has not been able since then to return to that level. Traders expect prices to come under pressure to show that the specified time frame on when he might start the U.S. Federal Reserve reduced its economic stimulus

Noted data from the International Monetary Fund on Friday that Germany has reduced its holdings of gold by 3.421 tonnes in October.

Germany is one of the first ten countries in the world in terms of gold reserves.

According to IMF data, the German central bank now has reserves of gold size 3387.25 tons

Turkey’s holdings of gold rose for the fourth consecutive month in October.

According to IMF data, the Turkish central bank increased its holdings of the precious metal in October by 12.994 tonnes to 503.255 tonnes.

And a series of increases in gold holdings due largely to the central bank last year allowed for commercial banks that retain a share of the gold within their reserves of cash in local currency

Gold price down to its lowest level since July after expectations that the U.S. Federal Reserve begins to reduce the stimulation and pumping money into the markets is likely to be so in future meetings , especially if there is further improvement in the labor market .

The quantitative easing program is the leader of strong gains for gold prices in recent years and is now heading for a record first annual loss since 2001 and about 700 tons came from holdings of index funds traded powered gold and topped Fund Spider Gold Trust , who alone out of him 450 tons and landed to 856.7 tons, which is the lowest since the beginning of 2009.

The World Gold Council noted that the demand is at its lowest level in four years in the third quarter and was relegated size Indian consumption of gold fell by about 32% in the third quarter to almost 148 tons , the lowest level since the beginning of the year 2009 . On the other hand tends to recording the biggest weekly loss in more than two months and the price of gold is heading to the silver with a weekly loss of up to 4 % and retarded since the beginning of the year about 25 %