BLBG:Gold Drops as Some Investors Sell Amid U.S. Budget Negotiations
Gold fell for the first time in five days as some investors sold the metal amid negotiations between U.S. lawmakers to strike a budget deal before the end of the year. Silver gained as investors boosted holdings to a record.
Spot gold lost as much as 0.4 percent to $1,653.55 an ounce and was at $1,658.30 by 12:54 p.m. in Singapore. Bullion is 6.1 percent higher this year, set for a 12th annual gain, as investors sought the metal as a protection of wealth after central banks around the world took steps to stimulate economies.
President Barack Obama and Congress return to Washington today and have five days to reach a deal to avert more than $600 billion in automatic spending cuts and tax increases from Jan. 1, known as the fiscal cliff. Treasury Secretary Timothy F. Geithner said he will take “extraordinary measures” to postpone a U.S. default into early 2013 amid the stalled talks.
“Gold’s one of the few investments with positive returns this year and it’s normal to get some profit-taking at the end of the year,” said Feng Liang, an analyst at GF Futures Co., a unit of the nation’s third-biggest listed brokerage. “Progress on the fiscal cliff will continue to affect market sentiment.”
Gold for February delivery dropped 0.1 percent to $1,658.70 an ounce on the Comex. Cash bullion of 99.99 percent purity gained 0.1 percent to 333.50 yuan a gram ($1,662.75 an ounce) on the Shanghai Gold Exchange, while metal for June delivery on the Shanghai Futures Exchange rose 0.3 percent to 338.35 yuan a gram.
Cash silver rose 0.1 percent to $30.0425 an ounce, increasing for a third day. The metal has climbed 7.9 percent in 2012 as holdings in exchange-traded products expanded 9.4 percent this year to 18,915.13 metric tons yesterday.
Spot platinum, the best performing precious metal in 2012, was little changed at $1,539 an ounce, up 9.9 percent this year. Palladium was also little changed at $692.25 an ounce, 5.7 percent higher this year.
To contact the reporter on this story: Glenys Sim in Singapore at gsim4@bloomberg.net
To contact the editor responsible for this story: Jake Lloyd-Smith at jlloydsmith@bloomberg.net
