Gold prices overcame most of a big early session loss Tuesday sparked by Standard & Poor's threatening 15 European nations with a credit rating downgrade.

The ratings agency said it might lower the ratings of the nations if Friday's Eurozone summit does not produce convincing evidence of a plan to deal with the continent's sovereign debt crisis.

In addition, S&P openly contemplated downgrading the Eurozone's bailout fund.

Stock and currency trading lacked direction. The dollar posted fractional gains and European as well as U.S. equities were mixed in late afternoon trading.

By late morning gold was down in light trading 1.7 percent, but short-covering and bargain hunting lifted the metal. By the end of floor trading the yellow metal was down a mere 0.16 percent.

Gold on the Comex ended the day down just $2.70 at $1,731.80, while spot gold rose $17.33 to $1,724.86.

Silver on the Comex climbed 37 cents to $32.74, while spot silver up 85 cents to $32.69.