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 year-end.
Spot gold lost as much as 0.4 percent to $1,653.55 an ounce and was at $1,657.80 at 3:15 p.m. in Singapore. Bullion is 6 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.
“Progress on the fiscal cliff will continue to affect market sentiment,” said Feng Liang, an analyst at GF Futures Co., a unit of China’s third-biggest listed brokerage. “Gold’s one of the few investments with positive returns this year and it’s normal to get some” selling at the year-end, Feng said.
Gold for February delivery dropped 0.1 percent to $1,658.40 an ounce on the Comex. Cash bullion of 99.99 percent purity slid 0.1 percent to 332.95 yuan a gram ($1,660.27 an ounce) on the Shanghai Gold Exchange, while metal for June delivery on the Shanghai Futures Exchange rose 0.2 percent to 337.89 yuan a gram.
Cash silver was little changed at $30.0088 an ounce, after swinging between gains and losses. The metal has climbed 7.8 percent in 2012 as holdings in exchange-traded products rose 9.4 percent this year to a record 18,915.13 metric tons yesterday.
Spot platinum, the best performing precious metal in 2012, was little changed at $1,538.62 an ounce, up 9.8 percent this year. Palladium was also little changed at $693 an ounce, 5.8 percent higher this year.
To contact the reporter on this story: Glenys Sim in Singapore at email@example.com
To contact the editor responsible for this story: Jake Lloyd-Smith at firstname.lastname@example.org