The dividing economic outlook between the U.S. and Europe is spurring the biggest swings for gold prices in a year as investors assess the prospect of higher American interest rates against the outlook for more global stimulus.

The metal™s 60-day historical volatility is near 18.8, the highest since January 2014. Futures settled lower after swinging between gains as losses today as a slowdown for German factory orders spurred declines for the euro, while fewer Americans filed for unemployment benefits last week.

Bullion in 2014 posted a consecutive annual decline for the first time since 1998 as gains in the U.S. economy signaled prospects for higher interest rates, cutting demand for the metal as store of value. Prices have rallied about 7 percent since falling to a four-year low in November amid political upheaval in Greece and expectations for increased economic stimulus in Europe and China.

Gold futures for delivery in February declined 0.2 percent to settle at $1,208.50 an ounce at 1:47 p.m. on the Comex in New York, after rising as much as 0.5 percent. Last year, gold declined 1.5 percent.

Source : Bloomberg