Gold rose on Wednesday, gaining from investor unease over the lack of a solution to the European debt crisis that dented other more industrial raw materials, such as crude oil and copper, ahead of further possibly weak U.S. data.

The commodities complex registered its largest daily gain in six months the day before, buoyed by optimism over EU leaders' ability to expand the Eurozone financial rescue fund, although by Wednesday, this upbeat mood had faded enough to boost the U.S. currency and undermine dollar-priced assets.

Gold, which earlier in the week saw its largest three-day fall in nearly 30 years in a rush for cash by investors, drew strength from the weakness in the equity markets and the fear that European leaders may not be able to ward off a Greek debt default.

Some analysts said the metal's reputation as a relatively safe store of value during economic troubles may have been hurt.

The only worry is obviously how burnt investors have become of this 20 percent correction, as something which was perceived to be safe suddenly was not any more, Saxo Bank senior manager Ole Hansen said.

The downside may need to be tested and rejected one more time in order to give bulls enough confidence to re-enter, he added. Strong physical demand should helped the market to find support relatively soon.

Spot gold rose 0.5 percent on the day to $1,656.79 an ounce by 1030 GMT, having hit a two-month low of $1,534.49 on Monday -- down from a lifetime high around $1,920 an ounce struck in early September.

The 19-commodity Reuters-Jefferies CRB index rose 2.7 percent on Tuesday in its biggest daily gain since mid-March this year.

GREEK DEBT

Hurdles Greece faces in its attempt to avoid bankruptcy and disagreements among Eurozone nations have sparked concern among investors that growth won't recover anytime soon.

An audit team from the European Union, European Central Bank and International Monetary Fund is expected to start arriving in Athens on Wednesday and begin talks the day after on the Greek government's plan to deepen budget cuts and raise new taxes.

There are still a lot of fears over Europe, and after yesterday's round of short-covering the upside for oil is limited, said Ken Hasegawa, a commodities derivatives manager with Newedge Brokerage in Tokyo.

Brent crude futures LCOc1 were flat at $107.15 a barrel, while U.S. crude CLc1 fell $0.05 to $84.38 a barrel. Oil prices rose by more than 3 percent on Tuesday.

Brent is poised to fall 5.5 percent in the third quarter, according to Reuters market analyst Wang Tao.

That's the second quarterly decline, and the steepest since the three months ended June 2010. U.S. crude is set to lose almost 13 percent this quarter, its largest drop since the fourth quarter of 2008.

Data on Tuesday showed that Americans worried about their incomes as they struggled to find work in September, holding consumer confidence near 2-1/2-year lows and pointing to weak spending in the months ahead.

Markets are waiting for U.S. durable goods orders for August, due later on Wednesday, which a Reuters poll estimated would be flat following a rise of 4.1 percent in July. .

Also bearing the brunt of investor nervousness over the impact to the global economy from the Eurozone debt crisis, three-month copper on the London Metal Exchange fell 3.3 percent to $7,345 a tonne, after surging 4.5 percent in the previous session, marking its largest one-day rise in 19 months.

There will be a certain degree of nervousness and you've seen what is happening in Greece, said Nick Moore, head of commodities research at RBS.

Fundamentals don't look bad, one has to be encouraged by increasing net refined Chinese copper imports, which have risen for four consecutive months.

China's imports of refined copper surged 21.2 percent to 235,509 tonnes in August compared to the previous month to reach their highest level since January.

China accounts for about 40 percent of global demand estimated at around 19 million tonnes this year, western Europe consumes about 15 percent and the U.S. 10 percent.

USDA STOCKPILE REPORT

Grains also fell, with investors looking to the U.S. Department of Agriculture's quarterly stocks report on Friday for signs that consumption may wane.

Wheat for December fell for the first day in four, easing 0.3 percent to $6.56-1/2 per bushel. Declines were limited by concern that drought may hamper the seeding of the U.S. winter wheat crop, traders said.

Soy for November eased 0.3 percent to $12.59-1/4, headed for a second quarter of declines.

Corn for December fell 0.5 percent to $6.48-3/4 per bushel, erasing Tuesday's gains. The grain has risen 2.9 percent this year, compared with declines in soy and wheat.

There are expectations that the USDA may report a larger-than-expected supply on corn, said Lynette Tan, a grains analyst at Phillip Futures in Singapore.

In the past week, the fall in grains is due to macro-economic issues, with people worried about a slowdown in growth and the crisis in the Eurozone. Usually, when macro sentiments are strong, investors tend to ignore the fundamentals.