Gold Drops as Some Investors Sell
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.