Gold futures fell, capping the longest run of weekly declines in two years, as a rally by the dollar curbed demand for the metal as an alternative investment.
The greenback rose to a two-week high against a basket of currencies ahead of President Barack Obama’s meeting with Democratic and Republican congressional leaders as a U.S. budget deadline approaches. Obama is set to propose a scaled-back package to avert tax and spending changes that may trigger a recession in 2013, a Democratic aide with knowledge of the talks said.
“It’s the dollar that is keeping gold quiet today,” Phil Streible, a senior commodity broker at R.J. O’Brien & Associates, said in a telephone interview. “We are seeing some flight to cash.”
Gold futures for February delivery fell 0.5 percent to settle at $1,655.90 an ounce at 1:41 p.m. on the Comex in New York. This week, the metal dropped 0.3 percent, the fifth straight decline and the longest slump since January 2010.
This year, gold has climbed 5.7 percent, heading for the 12th straight annual gain, after central banks from the U.S. to China increased fiscal stimulus to bolster their economies.
Silver futures for March delivery slipped 0.9 percent to $29.975 an ounce. This week, the price dropped 0.8 percent, the fifth straight decline. The metal has climbed 7.4 percent this year.
On the New York Mercantile Exchange, platinum futures for April delivery fell 0.9 percent to $1,521.60 an ounce. The price has advanced 8.3 percent this year.
Palladium futures for March delivery dropped 1.2 percent to $700.30 an ounce. Earlier, the price reached $710.80, the highest for a most-active contract since March 15. The metal has advanced 6.7 percent this year.
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