Gold is poised to snap a four-week losing run as an impasse in U.S. budget negotiations ahead of a year-end deadline and expectations for more stimulus in Japan increased demand for bullion as a protection of wealth. Spot gold was little changed at $1,662.80 an ounce at 12:12 p.m. in Singapore, rising 0.3 percent this week. Bullion is 6.3 percent higher this year, set for a 12th annual gain, as central banks from the U.S. to China took steps to shore up growth. Gold holdings in exchange-traded products reached a record 2,632.516 metric tons on Dec. 20 and are up 12 percent this year. Congressional leaders plan to meet President Barack Obama today, Senator Dick Durbin said, seeking a deal to avert more than $600 billion in automatic spending cuts and tax increases that start Jan. 1, known as the fiscal cliff. House Republican leaders announced the chamber will meet for its first Sunday session in more than two years on Dec. 30. Japanese data today showed a decline in consumer prices and industrial production, adding to the case for more stimulus measures. “While the expectation is for U.S. lawmakers to reach agreement in time, there’s also a real possibility they won’t,� said Sun Yonggang, a macroeconomic strategist at Everbright Futures Co., a unit of one of China’s largest state-owned investment companies. “Longer term, there’s still scope for more stimulus around the world as the global economic recovery remains uneven, and this will keep gold supported.� The central banks of Brazil, South Korea and Russia were among those that joined investors buying bullion to diversify assets this year. Gold is Morgan Stanley’s top commodity pick for 2013 and is expected to average $1,853 an ounce next year, the bank said in a Dec. 6 report. Bullish Outlook Gold, which has fallen 13 percent from its September 2011 all-time high of $1,921.15 an ounce, may climb to $2,000 next year, the median of 49 estimates in a Bloomberg survey published Dec. 18 showed. Prices are expected to peak in 2013 as the U.S. recovers, Goldman Sachs Group Inc. predicts. The economy grew at a 3.1 percent annual rate in the third quarter, according to Commerce Department figures released Dec. 20. Gold for February delivery was little changed at $1,663 an ounce on the Comex in New York. Fifteen of 19 analysts surveyed by Bloomberg expect prices to rise next week and one was bearish. A further three were neutral, making the proportion of bulls the highest since Aug. 24. Cash silver rose 0.3 percent to $30.245 an ounce, also set to snap a four-week decline. The metal has risen 8.6 percent in 2012 as investors boosted holdings in exchange-traded products 9.4 percent to a record 18,915.75 tons yesterday. Spot platinum, the best performing precious metal in 2012, climbed 0.2 percent to $1,536.25 an ounce, increasing 9.7 percent this year. Palladium gained 0.2 percent to $710 an ounce, the most expensive since March. The metal has advanced 8.4 percent 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

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