Gold regains strength on U.S. fiscal talks progress

SINGAPORE Wed Jan 2, 2013 8:35am IST

Gold Bullion from the American Precious Metals Exchange (APMEX) is seen in New York, September 15, 2011. REUTERS/Mike Segar/Files

Gold Bullion from the American Precious Metals Exchange (APMEX) is seen in New York, September 15, 2011.

Credit: Reuters/Mike Segar/Files

Related Topics

Border Security Force (BSF) soldiers ride their camels as they rehearse for the "Beating the Retreat" ceremony in New Delhi January 27, 2015. REUTERS/Ahmad Masood

"Beating The Retreat" Rehearsals

Rehearsals are on for "Beating the Retreat" ceremony which symbolises retreat after a day on the battlefield, and marks the official end of the Republic Day celebrations.  Slideshow 

SINGAPORE (Reuters) - Gold rebounded from intraday lows on Wednesday after last-minute talks to end the U.S. "fiscal cliff" crisis showed signs of progress.

A weaker U.S. dollar also lifted gold, which was likely to rise further as equities firmed on hopes the House of Representatives would vote to avert tax rises and spending cuts that are technically already in force, and prevent the country from plunging into recession.

Gold was steady at $1,675.50 an ounce by 0232 GMT after hitting a low around $1,670. Gold ended up around 7 percent in 2012 - the 12th straight year of gains for the precious metal, which makes it one of the longest bull runs ever for a commodity

"I still believe at the end of the day the talks on the fiscal cliff should go through but of course not without some twists and turns," said Brian Lan, managing director of GoldSilver Central Pte Ltd in Singapore.

U.S. gold for February was steady at $1,676.50 an ounce.

For a 24-hour gold chart analysis: here

After a day of deliberation, there appeared to be enough Republicans in the House ready to back a Senate bill that would raise taxes on the wealthiest Americans and close a crucial chapter of the budget dispute that has consumed Washington for months.

Strictly speaking, the United States went over the cliff in the first minutes of the New Year because Congress failed to produce legislation to halt $600 billion of tax hikes and spending cuts scheduled for this year that started kicking in on January 1.

A failure to clinch a deal may spur safe-haven buying of gold, but since many investors have both equities and gold in their portfolios, the metal may also track stock markets higher if an agreement is reached.

"Whatever happens in Washington, we suspect gold will likely do better over the next few weeks as the colossal failure of political will to get America's fiscal house in order should provide fodder for the gold bugs to bid prices higher," Edward Meir, metals analyst at brokerage INTL FCStone, said in a note.

Asian stocks started new year trading with tentative gains, while the dollar fell on Wednesday.

(Editing by Michael Urquhart)


After wave of QE, onus shifts to leaders to boost economy

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.

Reuters Showcase

Telecom Sector

Telecom Sector

India postpones mobile airwave auction to March 4.  Full Article 

Business Strategy

Business Strategy

Uber scraps commissions for its New Delhi taxis.  Full Article 



China's yuan breaks into the world's top five as payment currency - SWIFT.  Full Article 

India’s Male Tenor

India’s Male Tenor

India’s lone male tenor wants to ‘Indianise’ opera  Full Article 

Job Cuts

Job Cuts

Sony to cut 1,000 jobs in smartphone business - sources.  Full Article 

Reuters India Mobile

Reuters India Mobile

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