Gold futures fell to a one-week low Friday as stability in broader markets weakened the yellow metal's safe-haven allure.
The most-actively traded gold contract, for February delivery, was recently down $32.10, or 2.3%, at $1,354.90 U.S. a troy ounce on the Comex division of the New York Mercantile Exchange.
Despite gold's decline, traders say the precious metal will remain rangebound between $1,350 and $1,430 U.S. for a while. Gold lacks a stronger direction because investors are vacillating between fear and optimism about the global economy.
Gold is considered a safe-haven investment because it isn't as linked to industrial production as other assets like oil, copper and equities. This status spurs buying from investors who want to hedge against economic or political uncertainty. The metal hit a string of records last year amid widespread worries about the global economic recovery and concerns about European sovereign debt.
But as the economic recovery has gained steam, the metal has lost momentum.
After hitting its highest-ever intraday price of $1,432.50 U.S. last month, gold has pulled back to the mid-$1,300s U.S. as investors have begun preferring riskier assets like stocks. But they still remain cautious and tend to move into gold on any news that makes them jittery.
The latest contrast has been between worries about cash-strapped euro-zone nations like Spain and Portugal and optimism as global manufacturing continues to pick up and the U.S. unemployment rate falls.
That is keeping gold in limbo.
When gold does break out of its range, experts say it will likely move higher as participants remain more cautious than ebullient.
Until then, the metal may continue to trade in a choppy fashion as some participants view any pullback as making the metal cheap.
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