Gold slips on U.S. budget woes, but yen lifts TOCOM

SINGAPORE Wed Dec 26, 2012 6:49am IST

An employee shows dividing a gold Combibar at a plant of gold refiner and bar manufacturer Valcambi SA in the southern Swiss town of Balerna December 20, 2012. REUTERS/Michael Buholzer

An employee shows dividing a gold Combibar at a plant of gold refiner and bar manufacturer Valcambi SA in the southern Swiss town of Balerna December 20, 2012.

Credit: Reuters/Michael Buholzer

Related Topics

SINGAPORE (Reuters) - Gold edged lower on Wednesday on uncertainty over whether the United States will avoid a fiscal crisis, although a weaker yen sparked a rally in Tokyo bullion futures.

FUNDAMENTALS

* Gold had dropped $5.73 an ounce to $1,652.56 by 0056 GMT, off a 4-month low struck last week. The yellow metal is still on track for a 12th 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.

* With the year-end deadline for the U.S. to go over a "fiscal cliff" approaching, lawmakers played a waiting game on Monday in the hope that someone will produce a plan to avoid harsh budget cuts and higher taxes for most Americans from New Year's Day.

* Congress is expected to return to Washington on Thursday as President Barack Obama returns from a trip to Hawaii.

* U.S. gold futures for February slipped $6.00 an ounce to $1,653.50.

* Gold contracts on the Tokyo Commodity Exchange (TOCOM), which often influence movements in spot gold, rose after the yen dropped to a 20-month low against the dollar on growing hopes for further monetary easing in Japan.

MARKET NEWS

* Expectations that Japan's incoming prime minister will pursue drastic stimulus policies to drive the country's economy out of deflation helped weaken the yen and underpinned the Nikkei on Wednesday, while Asian shares were capped in thin holiday trade.

* U.S. crude futures edged up to around $89 a barrel on Wednesday.

(Reporting by Lewa Pardomuan; Editing by Joseph Radford)

FILED UNDER:

Surprise Rate Cut

Reuters Showcase

Documents' Leak

Documents' Leak

India widens oil leaks probe to defence ministry  Full Article 

Reuters Exclusive

Reuters Exclusive

Payment delays dent India's flagship health, AIDS programmes  Full Article 

Jim O’Neill Interview

Jim O’Neill Interview

'India can become world’s fifth-largest economy by decade’s end'  Full Article 

Food Security

Food Security

India will not cut multi-billion dollar food handout programme - PM  Full Article 

Ola's Expansion Drive

Ola's Expansion Drive

Taxi group Ola steps up expansion drive  Full Article 

Sahara Saga

Sahara Saga

Sahara's Grosvenor House hotel in London put up for sale   Full Article 

Suzlon Energy

Suzlon Energy

Suzlon expects to turn profitable in fiscal 2016: chairman   Full Article 

Beef Trade

Beef Trade

Maharashtra clamps down on beef trade through new act  Full Article 

Budget 2015

Budget 2015

Budget announcements and reactions from the industry  Full Coverage 

Reuters India Mobile

Reuters India Mobile

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