Gold retakes $1,700

Gold futures scaled the psychologically important $1,700 an ounce level on Thursday, recovering somewhat from a sharp selloff on Tuesday.

Gold for delivery in Feb traded 0.4% or $6.60 higher in late afternoon dealings at $1,700.40 an ounce on the New York Mercantile Exchange after earlier reaching a day high of $1,705.

Gold was boosted by comments from  European Central Bank President Mario Draghi  which  indicated continued weakness into 2014 and the likelihood of further economic contraction for the continent.

The dire forecast means the EU will continue to use quantitative easing programs similar to those in place in the US to boost growth which increases gold's allure as a hedge against inflation.

MarketWatch quotes Jeffrey Wright, managing director at Global Hunter Securities as saying the price movement was on the back of "bargain hunting"  along with "a little safe-haven action, coupled with the end of short-term profit taking.”

The precious metal’s gains for 2012 now stands at just under $95 or 5.9%. If gold can hold onto these levels through December it would mark the 12th year of a bull run in the shiny yellow metal.