The price of gold was extending losses Friday morning, with the US dollar trading mixed versus a basket of currencies with Washington moving towards breaking a stalemate over debt and averting a US default.
Gold for December delivery, the most actively traded contract, lost $12.10 to $1,284.80 an ounce. Yesterday, gold extended losses for a third session to settle below the $1,300-mark with the dollar trending higher against a basket of major currencies amid hopes of a breakthrough in the budget crisis with possibilities of raising the debt ceiling. Lawmakers in Washington finally seem to be taking steps toward a resolution to the fiscal crisis, with House Republican leadership proposing legislation to temporarily raise the nation's debt limit in order to avoid a default and allow time for negotiations.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, moved down to 896.38 tons from 898.18 tons.
Meanwhile, the U.S. dollar continued to level-off from around its nine-month low versus the euro, the Swiss franc and sterling, while recovering form near a 2-month low against the yen.
In economic news from the euro zone, Germany's EU harmonized inflation stayed unchanged in September as estimated earlier, final figures released by the Federal Statistical Office showed. The harmonized index of consumer prices (HICP) increased 1.6 percent year-on-year in September, which was unchanged from the growth rate seen in August. The September outcome was also in line with the preliminary estimates.
Meanwhile, Germany's wholesale prices declined for the second consecutive month in September, official data showed. Wholesale prices declined 2.2 percent year-on-year in September, which was the biggest fall since November 2009, Destatis said. The decline was faster than the 1.7 percent fall seen in August.
Elsewhere, the prices of silver and platinum were moving lower in morning deals.
From the U.S., Reuters and the University of Michigan are scheduled to release the results of their preliminary consumer sentiment reading based on a survey at 9:55 am ET. Economists expect the index to decline to 75 in October from 77.5 in September.
