PRECIOUS-Gold edges down, U.S. fiscal talks in focus

PRECIOUS-Gold edges down, U.S. fiscal talks in focus

* Targets $1,397-$1,447 range in 3 mths-technicals
* Washington stirs for “fiscal cliff” talks
* Coming Up: U.S. jobless claims Weekly; 1330 GMT

(Updates prices)
By Lewa Pardomuan
SINGAPORE, Dec 27 (Reuters) – Gold inched down in thin trade on Thursday, with investors keeping a close eye 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 $3.08 an ounce to $1,656.41 by 0548 GMT. It has come off a 4-month low struck last week, but remains below a record high of around $1,920 hit in September 2011.

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.

“Most investors are definitely not hoping for the worse as they don’t only hold precious metals in their investment portfolio. So of course they are hoping the talks will come through,” said Brian Lan, managing director of GoldSilver Central Pte Ltd in Singapore.

“But it doesn’t bode well for (precious) metals if the talks come through. However it will only be temporary as we foresee that metals will still continue to shine. In 2013, we are expecting precious metals to close the year higher compared to the price level we see today.”

A failure in the fiscal talks could spur safe-haven buying, boosting gold.

For the year, bullion is up around 6 percent, on track for a twelfth straight year of gains on rock-bottom interest rates, concerns over the financial stability of the euro zone, and diversification into bullion by central banks.

U.S. gold for February slipped $3.40 an ounce to $1,657.30.
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Stocks overshadow gold’s glitter with strong rally in 2012

NEW DELHI: Gold has been glittering bright for investors for many years, but the year 2012 saw Indian equities overshadow the yellow metal‘s sheen with returns of more than 25 per cent.

According to market experts, 2011 was very tough for the equity markets and the gains seen in 2012 are mainly because of a pullback rally towards the end on the back of factors like strong foreign fund inflow and reforms push, among others.

After outperforming the stock market for more than a decade, the appreciation in gold prices in the year passing-by has been lower than that of the Indian equities.

An analysis of gold prices and stock market movements shows that the BSE benchmark index Sensex rose by over 25 per cent this year, which was nearly double the gain of about 12.95 per cent in gold prices.

The appreciation in another precious metal, silver has also been almost similar at about 12.84 per in 2012.

The stock markets’ out-performance over the bullion market in 2012 shows a reversal of trends seen in the previous years.

While the stock market plunged about 25 per cent in 2011, gold had turned out to be the best asset class with 32 per cent surge during that period. The silver prices had also ended last year with a gain of about 8 per cent.

Historical data show that gold has given positive returns over the last 12 out of last 15 years. Also, gold prices have appreciated by an average of 20 per cent over the last 10 years, against about 18 per cent for equities.
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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. Continue reading