Gold prices headed for a fourth consecutive daily gain Wednesday as investors returned to the yellow metal for protection from the ongoing risks to the European economy and weakness in the U.S. economy.

The private Conference Board said Tuesday that consumer confidence in October fell unexpectedly to its lowest level in two-and-a-half years. The government said home prices were unchanged in August, another sign that housing may be stabilizing but it has yet to begin to grow.

The negative U.S. news plus the awareness that European leaders meeting in Brussels will not delivery the long hoped-for grand solution to the continent's two-year-old sovereign debt and banking crisis drove investors into gold.

After the release of the weak U.S. consumer confidence, bond yields dropped and that pushed gold prices higher. Now we are above $1,700, which is good because the technical momentum is looking better ... this is already in itself encouraging, Credit Suisse analyst Tobias Merath, told Reuters.

Since last Thursday gold has risen 5.4 percent to $1,700.20 per troy ounce, and silver has shot up 9.1 percent.

Sentiment seemed to have turned around in gold bulls' favor, Peter Fung, head of dealing at Wing Fung Precious Metals in Hong Kong, told Dow Jones Newswires, adding that the turnaround was seen after the metal's prices breached key resistance of $1,700 per troy ounces.

The yellow metal rose Wednesday despite an upturn in futures of the Dow Jones Industrial Average, the S&P 500 and the Nasdaq Composite, all of which were indicating a positive open. European stocks, meanwhile, were modestly higher.

The dollar and euro were barely moving. 

Gold for December delivery climbed $6.10 to $1,706.50, while cash gold rose $6.55 to $1,705.13.

Silver for December delivery increased 29 cents to $33.34, while cash silver added 20 cents to $33.32.