PRECIOUS-Gold dips, focus on U.S. budget talks

* Targets $1,397-$1,447 range in 3 mths-technicals

* India gold demand firm as jewellers stock up

* Coming Up: U.S. jobless claims weekly; 1330 GMT

By David Brough

LONDON, Dec 27 (Reuters) – Gold eased on Thursday and was in sight of last week’s four-month lows, with investors focused on talks between the White House and Congress to prevent the U.S. economy from plunging into recession next year.

Republican House of Representatives Speaker John Boehner urged the Democrat-controlled Senate to act to pull back from the so-called fiscal cliff and offered to at least consider any bill the upper chamber produced, raising hopes there may be a way through deadlock in Congress.

Gold fell $4.58 an ounce to $1,654.91 by 1059 GMT. It has come off a 4-month low of $1,635.09 struck last Thursday, but remains below a record high of around $1,920 hit in September 2011.

U.S. gold for February fell 0.3 percent to $1,655.70 an ounce.

The United States faces $109 billion in across-the-board spending cuts starting in January unless a deal is reached to either replace or delay them. Democrats want to switch the spending cuts to tax increases for the most part.

“If the politicians reach an agreement on the fiscal cliff, the dollar could suffer and there could be more investment into gold,” said Afshin Nabavi, head of trading at MKS Finance, referring to gold‘s behaviour as a risk asset similar to shares.

He said he expected gold to trade in a range of $1,650-1,670 per ounce in the near term.

“Every time we go to the lows near $1,650, there seems to be good buying,” Nabavi said, talking of brisk physical offtake over the past week from China and India, the world’s top two gold consumers.

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