PRECIOUS-Gold ends flat, U.S. budget talks in focus
* Gold finds support after Tuesday's almost 2 percent drop * Selling eases as Obama threatens to veto Republican plan * Open interest up as prices slump, new bearish bets eyed * Coming up: U.S. GDP data, jobless claims Thursday By Frank Tang NEW YORK, Dec 19 (Reuters) - Gold steadied with little overall change o n W ednesday, after dropping in the previous session to a 3-1/2 month low, as U.S. legislators appeared far from reaching deal to avert tax hikes and spending cuts which could threaten to send the economy back to a recession. Rallies in crude oil and a weaker dollar also helped the metal find a firmer footing after Tuesday's technical sell-off triggered by growing hopes that U.S. legislators are closer to reaching a deal that would avert a fiscal crisis next month. Selling pressure, however, dried up on Wednesday as progress in talks in avoid a fiscal crisis appeared to stall. President Barack Obama accused Republicans of digging in their heels due to a personal grudge against him, while a Republican leader called the president "irrational." The uncertainty about the U.S. budget talks has dampened investors' interest in gold. After Tuesday's sell-off, bullion is on track to end the fourth quarter down almost 6 percent to match its worst quarterly performance since the third quarter of 2008 at the height of the global economic crisis. "The attraction of holding gold should wane as any agreement that restores ... revenue increases and spending cuts over the next 10 years would be an important step in getting the U.S. fiscal house in order," said Edward Meir, metals analyst at brokerage INTL FCStone. Spot gold inched up a penny at $1,669.55 an ounce by 3:39 p.m. EST (2039 GMT). U.S. COMEX gold futures for February settled down $3 cents an ounce to $1,667.70, with trading volume about 20 percent below its 30-day average, preliminary Reuters data showed. Open interest, a gauge of market activity, surprisingly climbed 4,000 lots to 435,742 contracts on Tuesday even though bullion prices dropped 2 percent, suggesting newly created bearish bets are weighing on gold prices, traders said. Silver dropped 1.5 percent to $31.16 an ounce. STRUGGLING WITH UNCERTAINTY Gold struggled to make headway amid uncertainty over the budget negotiations on spending cuts of $600 billion and tax hikes due next year which threaten to push the U.S. back into recession. Year to date, gold is up around 7 percent and set for a 12th straight year of growth, driven by rock-bottom interest rates, concerns over the financial stability of the euro zone and diversification into bullion by central banks. A 7 percent gain in gold this year would be well below an average return of 16 percent over the past 12 years. Among other precious metals, platinum inched down 0.2 percent to $1,587.40 an ounce and palladium was up 0.8 percent at $692 per ounce. Underscoring prospect of a shortage, South Africa wants to impose export curbs on minerals such as platinum and iron ore as part of a drive by the government to create more jobs in industry in the continent's biggest economy, a top official said on Wednesday. 3:39 PM EST LAST/ NET PCT LOW HIGH CURRENT SETTLE CHNG CHNG VOL US Gold FEB 1667.70 -3.00 -0.2 1664.20 1677.80 140,702 US Silver MAR 31.116 -0.553 -1.7 31.075 31.870 41,621 US Plat JAN 1592.90 -0.80 -0.1 1588.10 1602.90 13,258 US Pall MAR 698.35 7.40 1.1 687.30 699.60 4,600 Gold 1669.55 0.01 0.0 1664.13 1676.61 Silver 31.160 -0.460 -1.5 31.060 31.780 Platinum 1587.40 -3.60 -0.2 1592.00 1604.20 Palladium 692.00 5.50 0.8 689.00 696.50 TOTAL MARKET VOLUME 30-D ATM VOLATILITY CURRENT 30D AVG 250D AVG CURRENT CHG US Gold 156,153 184,787 174,396 12.98 -0.12 US Silver 45,741 59,658 52,585 22.2 1.55 US Platinum 19,120 10,067 8,902 17.86 -0.55 US Palladium 4,602 6,238 4,737
- Tweet this
- Share this
- Digg this
DAVOS, Switzerland - Central banks have done their best to rescue the world economy by printing money and politicians must now act fast to enact structural reforms and pro-investment policies to boost growth, central bankers said on Saturday.
Trending On Reuters
U.S. President Barack Obama ended a landmark day in India on Monday with a pledge of $4 billion in investments and loans, seeking to release what he called the "untapped potential" of a business and strategic partnership between the world's largest democracies. Full Article | Slideshow