Wholesale gold bullion prices hovered around $1,650 an ounce Friday morning in London, having earlier hit fresh four-month lows, while stocks edged lower and US Treasuries gained despite little evident progress in Washington to avoid the so-called fiscal cliff. Silver traded either side of $30 an ounce meantime, having yesterday dipped below that level for the first time since August, while oil prices dipped slightly and copper ticked higher. "Precious metals continued to stall overnight," says a note from refiner MKS. "Sentiment has clearly...as a result of a number of key support levels being tested or coming into play...[although] gold did not decline any further overnight buoyed by physical bids from both Europe and Asia...there is still a strong drive by the speculative side of the market to short and is evident by the heavy selling into rallies on Comex." Heading into the weekend, gold looked set for its biggest weekly loss since June by Friday lunchtime in London, and its fourth in a row, with gold trading 2.7% below last Friday afternoon's London Fix price. Earlier in the day, gold and silver hit four-month lows, extending yesterday's losses that followed news of an upward revision to US GDP growth for the third quarter. Silver meantime looked set for its biggest weekly drop since September 2011, down 7.7% on the week. Gold in Sterling is below where it started 2012, trading as low as £1006 an ounce this morning, while gold in euros is also below where it was by the first week of January, despite setting a new all-time high as recently as October. Over in Asia however, "China and especially Indian demand has jumped," said a senior Swiss logistics executive, speaking to BullionVault late Thursday. Indian importers, he said, after shipping relatively low volumes of gold and silver bullion around Diwali – typically the busiest season for the world's #1 consumers – are using the drop in prices to help wholesalers replenish their stockpiles, slowly run down over 2012. The Chinese New Year falls in 2013 on 10 February. "This feels like the jump in demand we got in 2010/2011," our Swiss contact says, pointing to the supply-chain problems of January last year, when strong Chinese demand met New Year holidays at the leading Swiss suppliers. Indian gold demand improved Friday, newswire Reuters reports, while the Shanghai Gold Exchange had one of its busiest days of 2012 in terms of volumes traded. In Washington meantime there was no House of Representatives vote on speaker John Boehner's so-called “Plan B� for dealing with the US deficit and thus avoiding the so-called fiscal cliff of tax cut expiries and spending cuts, worth around $600 billion, currently due to begin at the end of this month. "The House did not take up the tax measure today because it did not have sufficient support from our members to pass," said Boehner last night. "Now it is up to the president to work with Senator [Harry] Reid [Democrat Senate majority leader] on legislation to avert the fiscal cliff."

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