MW: Gold aims to extend losses to a second session
By Myra P. Saefong and Sarah Turner, MarketWatch
SAN FRANCISCO (MarketWatch) — Gold futures edged lower Wednesday, looking to extend the previous session’s hefty losses, as expectations for a resolution to the U.S. fiscal cliff continued to weigh on the metal’s prices, keeping them well below $1,700 an ounce.
Gold for February delivery GCG3 +0.16% fell $3.80, or 0.2%, to $1,666.90 an ounce on the Comex division of the New York Mercantile Exchange.
On Tuesday, the precious metal contract fell $27.50, or 1.6%, to settle at $1,670.70 an ounce — its lowest settlement price since Aug. 30.
The drop on Tuesday followed a rise in U.S. home-builder confidence, progress in negotiations to avert the U.S. fiscal cliff and a credit-rating upgrade for Greece — factors that worked to dull the metal’s safe-haven appeal. See: Gold futures settle at lowest since late August.
“Near-term sentiment for gold is down, and is linked to optimism on U.S. fiscal cliff deal in recent days — along with improvement coming in relation to Greece’s debt situation in the past couple of days,” said Jeffrey Wright, managing director at Global Hunter Securities.
“Profit taking from institutions appear to be also holding gold back from $1,700 as funds lock in gains before year-end,” he said.
Negotiations in Washington over a deal to avert steep spending cuts and tax increases, also known as the fiscal cliff, set to begin next month continued. On Tuesday, House Speaker John Boehner floated a so-called Plan B to increase taxes on incomes of $1 million above. Read: Boehner floats ‘Plan B’ as cliff deadline nears.
“Near term, any deal is bearish for gold,” said Wright.
Some investor willingness to take on risk undermined the U.S. dollar, offering a little support for dollar-denominated commodities. The ICE dollar index DXY -0.18% slipped to 79.130 on Wednesday, down from 79.349 in late U.S. trading on Tuesday.
In economic news Wednesday, the Commerce Department reported that construction on new U.S. home fell 3% in November to a seasonally adjusted annual rate of 861,000. Economists polled by MarketWatch expected a fall to a rate of 865,000. See: U.S. housing starts fall 3% in November.
Around the wider metals complex, silver for March delivery SIH3 -0.85% fell by 37 cents, or 1.2%, to $31.30 an ounce.
March palladium PAH3 +0.72% climbed $1.40, or 0.2%, to $692.35 an ounce, while January platinum PLF3 +0.28% rose 90 cents, or 0.1%, to $1,594.60 an ounce.
Copper for March delivery HGH3 -1.15% traded at $3.61 a pound, down 4 cents, or 1.2%.
