Gold eases; investors focus on U.S. fiscal woes

LONDON Wed Nov 14, 2012 5:42pm IST

Gold bullion coins known as Krugerrands are pictured in the mint where they are manufactured in Midrand outside Johannesburg October 3, 2008. Picture Taken October 3, 2008 REUTERS/Siphiwe Sibeko/Files

Gold bullion coins known as Krugerrands are pictured in the mint where they are manufactured in Midrand outside Johannesburg October 3, 2008. Picture Taken October 3, 2008

Credit: Reuters/Siphiwe Sibeko/Files

Related Topics

Stocks

   
Rajalakshmi (C), 28, smiles after winning the Miss Wheelchair India beauty pageant in Mumbai November 26, 2014. REUTERS/Danish Siddiqui

Miss Wheelchair India

Seven women from across India participated in the country's second wheelchair beauty pageant, which aims to open doors for the wheelchair-bound in modelling, film and television, according to organisers  Slideshow 

LONDON (Reuters) - Gold prices dipped on Wednesday, taking a cue from copper and some other industrial metals, but market talk was still dominated by theories on how the United States can avoid a crushing fiscal crisis, while platinum rose on supply concerns.

Spot gold fell 0.1 percent to $1,722.91 an ounce by 1127 GMT, moving further away from last Friday's three-week high around $1,738. U.S. gold futures for December dipped 0.1 percent to $1,722.80.

Bullion hit a record $1,920.30 in September 2011, when investors turned to the metal as a safe haven as Europe's debt crisis gathered steam.

Eugen Weinberg, global head of commodities research at Germany's Commerzbank, said even though gold had eased with industrial metals, the market was underpinned by strong support in the $1,700 area and had potential to firm.

Sentiment centred on the so-called "fiscal cliff", with investors debating on how long Washington will take to find compromises and avoid a series of mandated tax hikes and spending cuts that could send the world's largest economy back into recession.

"If we have brinkmanship, and we don't see a resolution, that could put downward pressure on gold," said Daniel Brebner, analyst with Deutsche Bank.

"That would be a liquidity-driven risk event. If more investors are looking to hold dollars, gold could underperform the dollar," he argued, in a reference to buying of dollars as a safe haven in preference over gold.

However, other analysts see an impasse on the "fiscal cliff" boosting bullion's appeal.

President Barack Obama is scheduled to hold a news conference on Wednesday when he will be questioned about negotiations on the fiscal backdrop.

Participants in an annual gathering of the London Bullion Metal Association on Tuesday said they expected gold to reach $1,843 an ounce by the time of the next conference in September 2013, and forecast silver to reach $38.40.

Silver was up 0.18 percent at $32.52 an ounce.

PLATINUM DEFICIT EXPECTED

Platinum climbed to $1,597.50, its strongest since October 23, driven chiefly by supply concerns highlighted by refiner Johnson Matthey.

Sister metal palladium marked its strongest since October 18 at $647.22, and was last at $637.00.

Supply outages in South Africa are set to push the platinum market into deficit this year as shipments from the world's main producer of the metal fall by the equivalent of more than a month's demand, Johnson Matthey said on Tuesday.

"There is concern for platinum producers in South Africa -- their financial strength and the continued tension between labour groups," Brebner said.

The bulk of the world's platinum is used by automakers in autocatalyst systems that scrub exhaust fumes of dangerous and environmentally damaging chemicals.

Anglo American Platinum AMSJ.J has made a new offer to striking workers at its South African mines, a labour leader said on Wednesday, after two months of wildcat action that has cost it about $250 million worth of output so far.

(Editing by Veronica Brown)

FILED UNDER:

REUTERS SHOWCASE

WTO Trade Deal

WTO Trade Deal

WTO clinches first global trade deal in its history  Full Article 

Kashmir Attack

Kashmir Attack

Ten dead in Kashmir's worst militant attack in more than a year  Read 

OPEC Meeting

OPEC Meeting

Saudis block OPEC output cut, oil price sinks further.  Full Article 

E-Commerce Boom

E-Commerce Boom

Online grocers come up trumps in India's e-commerce boom   Full Article 

GDP, RBI Preview

GDP, RBI Preview

GDP growth set to weaken, business wants reforms more than rate cut  Full Article | Related Story 

Jaitley to Rajan

Jaitley to Rajan

Jaitley likely to meet Rajan on Monday to urge rate cut  Full Article 

Banking Sector

Banking Sector

India moves to allow more businesses to offer basic financial services.  Full Article 

Jamini Roy

Jamini Roy

Photo Gallery – Bengali household name Jamini Roy’s paintings  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage