S&P 500
2003.37
+6.63 +0.33%
Dow Indu
17098.45
+18.88 +0.11%
Nasdaq
4579.40
+21.71 +0.47%
Crude Oil
95.71
-0.25 -0.26%
Gold
1287.925
+1.530 +0.12%
Euro
1.31399
+0.00181 +0.14%
US Dollar
82.721
-0.067 -0.09%
Strong

Gold falls on uncertainty over U.S. budget talks

Investors are selling gold as the end of the year draws closer without a compromise in hand for the U.S. budget.

Gold for February delivery dropped $21.10 to finish Thursday at $1,696.80 per ounce.

Investors are uncertain about what's ahead for the economy if Republicans and President Barack Obama fail to agree on a new budget. Without an agreement in place, tax increases and spending cuts will occur Jan. 1 that many economists believe could send the U.S. into a recession.

The Federal Reserve has announced measures to support the economy, which typically benefit gold and other commodities. But the Fed also predicted growth will be no more than 3 percent in 2013. It also expects the unemployment rate to remain at higher levels until late 2015. The unemployment rate was 7.7 percent in November.

Although gold prices rose Wednesday on the Fed's announcement, investors began selling Thursday to lock in profits, which suggests they believe the Federal Reserve may have run out of ways to help the economy, Kingsview Financial Group analyst Matt Zeman said.

Investors are also concerned about an apparent lack of progress in the budget negotiations. "It's likely to get more erratic as the time window continues to close here in the next two weeks," he said. "I'm looking for just a lot of erratic, sloppy trade without a whole lot of meaning behind it right now."

"It's really hard to gauge what's truly going on this time of year when a lot of people have already called it a year," Zeman said.

In other metals contracts for March, silver fell $1.427 per ounce, or 4.2 percent, to end at $32.355 per ounce, copper dropped 5.6 cents to $3.66 per pound and palladium fell $9.50 to $691.65 per ounce. January palladium dropped $33.60, or 2 percent, to $1,612.80 per ounce.

Other commodities were mostly lower.

What are today's top 50 stocks? This free list will share the big market movers on a daily basis to help you find trading opportunities.

View this list for free now.

Benchmark oil fell 88 cents to finish at $85.89 per barrel, heating oil fell 2.31 cents to $2.9437 per gallon, wholesale gasoline dropped 4.44 cents to $2.6021 and natural gas ended down 3.5 cents at $3.347 per 1,000 cubic feet.

In agricultural crop contracts, March wheat fell 3.5 cents to end at $8.085 per bushel, March corn dropped 5.25 cents to $7.2025 per bushel and January soybeans rose 3 cents to $14.765 per bushel.

Orange juice futures rose for a fourth straight day on concerns about next year's production in Florida. Frozen orange juice concentrate for January delivery rose 3.15 cents, or 2.3 percent, to end at $1.3725 per pound.

By SANDY SHORE
AP Business Writer

Comments

  1. Martin says:

    I would guess masive attempt to shake off of weak hands.Thanks god,it its extended time for taking late position or buy more.Don´t be faintharted.Martin

  2. kelli rose says:

    I am amazed that investors can't see the manipulation by our government working with Goldman and JPM to manage
    the paper market pricing in both gold and silver. Check the paper short positions that JPM has in the silver market ,,, 35000 contracts @ 5000 oz each or 175 million oz short compared to the law that one can only be short 350 contracts ... CME group which is the regulator closes their eyes to this criminal activity as does the CFTC. Same type of situation exist in the gold market. Don't y wonder why prices go down when the FED will increase their buying of treasuries (1 triilion at a time) ...

    • Rasesh Shukla - India says:

      Dear Kelli,

      Thanks for such very valuable as well important information. As i think, there are many many such hidden concerned maters, and many interested parties fabricating some great manipulation in the market, which will be resulted in "Never Before Found" fluctuations, and will prove as "Financial Earth Quack " Million dollar question is "whether government or respective is unaware of any such move? or knowingly ignoring this with some specific interest of its own or of some groups. whatever it may be, but the ultimate cost of this disaster will be paid by common public.

  3. Ken says:

    The reason gold fell was because the bullion banks are manipulating the prices

  4. David says:

    What a ride up in gold stock prices yesterday, and a ride down today.

  5. don wright says:

    All markets will do their best to go against "conventional" wisdom.

    • Rasesh Shukla - India says:

      Your bi-sided statement is confusing, and it can be taken for either sided views, so please clearly point-out, what you want to say, and what is the meaning of "conventional Wisdom"?and what is such conventional wisdom indicates at present?

      • Reality Check says:

        "Conventional Wisdom" among all of us who read blogs/articles like this is the gold is going up, not just up, but WAY up. Don't believe me? Go ahead and post something like "gold will be decline to $1,500 by the end of next year." Watch all the "believers" jump on you; then, count the number of folks that support your statement.

        I personally think gold is going MUCH higher too, but where is the 30, 40, 50% correction that all bull markets experience on their way to historic highs? Gold has had no such thing. Will it?

        • Rasesh Shukla - iNDIA says:

          yes i agree with you, there are very few people always, when you tell anything about down....simply because contrariety is not easily or widely acceptable.

          After first sizable fall, in a medium to long term, gold will fulfill all required correction points.

  6. don wright says:

    All of the gold ads on TV and radio are worrisome from a contrary perspective, not to mention in conjunction with most bullish gold forecasts for year end being way off. The mining stocks seem to be saying, something is really wrong in metals land.

    • Rasesh Shukla - India says:

      is is advance action on anticipation of any adverse move? if any one know this even, or aware of this too, who is bloody want to tell this?

      • Martin says:

        Dear Ranesh its common sense,you can deceive always deceive some people all the time and all people for some time..............and you certainly know the rest.........Martin

        • Rasesh Shukla - iNDIA says:

          for your kind information, i must tell you that i was one of the very earlier bullish in year 1998 - 2001 when nobody even believe to find any significant rise in gold and silver, so avoid to identify me "deceive always deceive" i am neither deceive all the time, nor want to be in a opposite side thereof too, for all the time.

© Copyright INO.com, Inc. All Rights Reserved.