With continental equities in the US and Europe surging back in recovering losses registered in the previous day, demand for gold futures slid back a bit on Wednesday as investors picked up some confidence on concerns about European sovereign finances.

Such renewed trust was largely brought about by the spiked up interest shown by traders on Portuguese and Polish bonds, prompting the precious metal's retreat from Tuesday's high of $US1259.30 as US stocks and commodities gave up gains from previous market sessions on a day that also saw the declines of dollar and yen, which along with gold were traditionally regarded as safe havens.

Frenetic trading for gold's December deliveries dropped by $US1.80 or 0.1 percent to close at $US1257.50 on the Comex division of the New York Mercantile Exchange following the record levels seen yesterday, which was only shadowed by the intraday high of $US1266.50 posted on June 21 this year.

Frank McGhee of Brokerage Services LLC said that gold was bound to encounter some rough sailings once it reached record highs as he noted that the market rally was mostly caused by concerns about the employment instability that convinced most traders to hold their money in the market.

Analysts said that in spite of the pullback on Wednesday, the price of gold is still high, which they said indicated investors' reservations on the European situation and the sluggish movement of the global economic recovery, further sustaining the use of gold as a safe refuge owing to its relative detachment from the general economic cycles.

Also, New York trading for other precious metals witnessed gains for major offerings as the Comex December silver finally closed at 0.5 percent after flirting with an intraday high of $20.80 while the Nymex October platinum collected improvements of 0.4 percent, with the December palladium rising by 0.7 percent on the same day.