Gold eases but on track for 1st wkly gain this month

Gold gave up early gains and ticked down on Friday ahead of talks to prevent the United States from plunging off a “fiscal cliff” of tax increases and spending cuts, but prices remained on track for their first weekly gain in a month.

Failure to clinch a deal in the US would likely spur safe-haven buying of bullion, but since many investors have both equities and gold in their portfolios, the metal may also track stock markets higher if the White House and Congress finally reach an agreement.

Gold fell $1.58 to $1,661.71 an ounce by 0649 GMT after rising to as high as $1,665.99. For the year, gold is up around 6%, but well below a record of around $1,920 hit in September 2011, when a worsening debt crisis in Europe sparked a buying rush.

“We do expect a … deal to happen at the last minute, but it will be a minimal deal,” said Dominic Schnider, an analyst at UBS Wealth Management in Singapore. “I think that should be gold supportive.”

President Barack Obama will meet congressional leaders at the White House on Friday to try to revive negotiations to avoid tax hikes and spending cuts – together worth $600 billion – that will begin to take effect on January 1.

Even a partial agreement on taxes that would leave tougher issues like entitlement reform and the debt ceiling until later could be enough to keep markets calm.

US gold for February eased $1.20 an ounce to $1,662.50.

In other markets, the yen fell to its lowest level in more than two years on Friday, lifting Japanese stocks to 21-month highs on expectations of drastic monetary easing, while shares in the rest of Asia rose as Washington races to avoid a fiscal crisis.
Read More

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>