Gold Drops as Some Investors Sell Amid U.S. Budget Negotiations

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.
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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 ends below Rs 31k level on sustained selling, global cues

NEW DELHI: Gold prices dip below Rs 31,000 level per 10 gm in the national capital today on sustained selling by stockists in tandem with a weak global trend.

The yellow-metal declined by Rs 100 to Rs 30,900 per 10 gm.

However, silver recovered by Rs 100 to Rs 57,500 per kg on scattered enquiries from industrial units.

Sentiments in gold remained bearish for the second straight day after it fell in overseas markets as some investors sold the metal amid negotiations among US lawmakers to strike a budget deal before the year-end.

The gold in global markets, which normally set price trend on the domestic front, lost 0.4 per cent to USD 1,653.55 an ounce in Singapore.

Besides, sluggish demand from retail customers due to end of marriage season further fuelled the downtrend.
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