Spot gold prices opened London on Wednesday $2 higher from the US close, starting the European session at $686 per ounce.
Overnight in Asia gold had dipped as low as $683 – its closing low of last Thursday.
"There's some sort of long liquidation," said one Hong Kong dealer to Reuters, "while bargain hunters seem to be waiting for the price to drop to $680."
Technical analysts at Standard Bank also cite $680 as key support for the spot price of gold in Dollars.
"It remains important for gold to hold above [that level] in order to keep the upward momentum going," says today's London report.
"Repeated failures at the resistance level of $692/695 could pave the way to further weakness...[even though] sentiment is still bullish for the yellow metal."
Against the other major currencies, gold also recovered slightly in Asian trade.
Gold priced in Sterling opened London today 1.0% down from Tuesday's start, trading at £342.25 from a low of £341 per ounce.
Versus the Euro, physical gold bullion dipped within 80 cents of €500 per ounce, the low hit twice in the last two weeks. It opened London at €502.50.
Why the decline in gold seen on Tuesday?
"People are holding back now to see direction from oil prices and the currency market," reckoned Tatsuo Kageyama, an analyst at Kanetsu in Tokyo, to Bloomberg earlier.
"There was some disappointed selling after gold prices failed to test the $700 an ounce level in recent days."
"Some of the retail investors are a bit nervous," adds a dealer in Singapore.
"I guess breaking $700 is not going to come around soon. Sometimes, when the expectation is too high, it just doesn't happen." (For a full technical analysis, click here...)
Many commentators called repeatedly for $700 per ounce in the last week. But irony aside, Tuesday's drop matched declines seen in the world's major stock markets.
The FTSE100 in London closed 1% lower. The S&P500 index also lost that much intra-day, before ending the New York session unchanged.
The newswires blame Tuesday's news of weak sales of existing US homes in March, down 8.4% from a year earlier.
Today will bring new-build US housing data, also expected to come in well below recent levels. (Read more about the slow-motion subprime collapse here...)
Weaker US data should, if anything, weaken the US Dollar according to most analysts. Lower Fed interest rates will only push alternative currencies higher, they think.
The Euro, for instance, opened London today traded above $1.3640.
But gold has failed to rise on Dollar declines so far in 2007. Indeed, it seems to be moving more in sync with global stock markets!
Whatever happened to gold as a "safe haven"? Click here to find out...