Gold gains to settle above 1,600-dollar mark

CHICAGO – Gold futures on the Comex division of the New York Mercantile Exchange ended higher on Wednesday, buoyed up by a slight decline in the US dollar, as efforts to revive the high-stake budget talks in Washington were in the spotlight.

The most active gold contract for February delivery edged up 1. 2 dollars, or 0.07 percent, to settle at 1,660.7 dollars per ounce.

Gold futures had mildly declined in electronic trading as the US dollar gained against the Japanese yen, but the greenback eventually turned lower. Prices for dollar-denominated commodities usually become more attractive to holders of other currencies when the dollar weakens.

Analysts say that the gold market has been undergoing too much selling recently due to concerns about the so-called US “fiscal cliff,” a combination of tax hikes and spending cuts due to kick in next January if a budget deal cannot be reached in Washington.

Just days ahead of the Jan. 1 deadline, President Barack Obama is due to return to Washington early on Thursday, while Congress members may also return to the US capital the same day for more talks on the “fiscal cliff.”

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