Gold was little changed on Wednesday, marking time after US lawmakers gave renewed assurances that a deal to avert a US default was within reach.

Officials said late on Tuesday an agreement to lift the government's $16.7 trillion borrowing limit was near after two separate legislative efforts in the House were buried by Republican rebellions, fraying market nerves.

Spot gold was unchanged at $1,280.70 an ounce by 1154 GMT. It plunged to its lowest since July 10 at $1,251.66 on Tuesday before rebounding. Analysts see technical support around July lows, between $1,235 and $1,240.

US gold futures for December were up $6.90 an ounce at $1,280.20.

"This week we are seeing gold struggling despite the fact that it is looking quite likely the negotiations over the U.S. debt ceiling will be dragging on for another day or two," Mitsubishi analyst Jonathan Butler said.

"If an agreement isn't reached, we might see a technical default, but there is a view that this won't be a real default, simply that the U.S. have failed to get to an agreement on time, and any potential support to gold would be short-lived," he added.

If Washington does not reach a deal by Thursday, the US government will by law no longer be able to add to the national debt and will have to rely on incoming revenue and about $30 billion in cash to meet obligations.

That money is expected to run out quickly, and the government would start missing payments in the weeks ahead. A global financial crisis could follow if investors decided that U.S. debt, used as collateral for trillions of dollars in financial deals, no longer provided adequate security.

Gold has fallen about 4 percent since the government shutdown began on Oct 1, disappointing investors who had hoped that uncertainty over the U.S. economic situation could spur safe-haven bids.

Instead, prices have been hurt by large sell orders, amplified by technical selling, over the period. - Reuters