Gold prices fought back after Wednesday's fall as Washington appeared closer to making a deal to avert the looming fiscal cliff. Talks continued between the two sides and there was hope a resolution could be made by year's end.

Carlos Sanchez, director of asset management with CPM Group, said the longer investors have to wait for a deal, the more likely gold prices will rise.

He said to Kitco, "Uncertainty will support gold prices, while a resolution will bring prices down. We can see gold prices heading higher for the next week or two, rising to $1,780-$1,800."

Other analysts see higher gold prices regardless of the fiscal cliff outcome.

Economist Intelligence Unit's Caroline Bain said to Reuters, "It could be positive for gold whichever way the negotiations go, but a rally on a speedy resolution might be quite a short-term positive, whereas any risk of prolonged sovereign stress could be a longer-lasting positive."

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