Bloomberg the Company & Products

Bloomberg Anywhere Login


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Gold Drops to Lowest Level in a Week on U.S. Budget Negotiations

Dec. 13 (Bloomberg) -- Gold declined to a one-week low as a rally to the highest level this month prompted some investors to sell the metal amid concern about the U.S. budget deadlock. Silver, platinum and palladium retreated.

Spot gold slumped as much as 1 percent to $1,694.35 an ounce, the lowest price since Dec. 7, and traded at $1,699.17 at 3:04 p.m. in Singapore. The metal climbed to $1,723.40 yesterday, the most expensive since Nov. 30, after the U.S. Federal Reserve said it will expand asset purchases. The rally was “modest” as additional Fed balance sheet expansion was already “priced in,” according to Goldman Sachs Group Inc.

Gold dropped with other commodities including oil and copper as the dollar rebounded from a three-day decline against a basket of six major currencies. U.S. lawmakers said it’s becoming less likely an agreement on the budget can be enacted before the Christmas holiday, as House Speaker John Boehner said yesterday both parties have “got some serious differences.”

“Investors are now focused on the fiscal cliff negotiations, which are looking protracted and threatening to weigh on all markets,” said Xiang Nan, an analyst at CITICS Futures Co., a unit of China’s biggest listed brokerage. “ We view a drop below $1,700 as a good buying opportunity. The Fed sent a strong signal about supporting the economy and keeping the easy monetary policy stance unchanged, which should support higher gold prices in the longer term.”

Prices may be underpinned at $1,662 to $1,672.50, according to technical analysis from Commerzbank AG, an area of support made up of the November low, 200-day moving average and 50 percent retracement of the May-to-October rise, technical analyst Karen Jones wrote in a report.

Fed Purchases

Gold is up 8.6 percent this year as central banks around the world added to stimulus to spur growth. The Fed will buy $45 billion a month of Treasury securities starting in January and will keep monetary policy accommodative as long as needed to boost the economy. Still, Fed Chairman Ben S. Bernanke said monetary stimulus cannot offset the full effect of the so-called fiscal cliff of automatic tax increases and budget cuts set to go into effect next year.

Gold for February delivery lost 1.2 percent to $1,697.10 an ounce on the Comex in New York. Holdings in exchange-traded products yesterday fell for a second day to 2,626.049 metric tons from a record on Dec. 10, data compiled by Bloomberg show.

Cash silver dropped 1.8 percent to $32.8644 an ounce after jumping 1.5 percent yesterday, the most since Nov. 23. Spot platinum slid 1.3 percent to $1,614.24 an ounce, retreating for the first time in six days. Palladium fell 1.3 percent to $686.50 an ounce.

To contact the reporter on this story: Glenys Sim in Singapore at

To contact the editor responsible for this story: James Poole at

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.