Gold fell for a second day in New York on speculation that a recovery in U.S. housing and improving prospects for a budget deal in Congress will ease pressure on the Federal Reserve to expand monetary stimulus.
Builders in November capped the strongest three months for residential construction in four years, and building permits advanced to four-year high, a U.S. government report showed today. Lawmakers are in talks to avert more than $600 billion in tax increases and spending cuts set to begin next month, which is a “major risk factor” to the economy, Fed Chairman Ben S. Bernanke said last week, after announcing plans for additional stimulus.
“The Fed has said they’re going to be doing everything they can on concern over the fiscal cliff, and without that concern, we may avoid the need for further stimulus,” David Meger, the director of metal trading at Vision Financial Markets in Chicago, said in a telephone interview.
Gold futures for February delivery slid 0.2 percent to settle at $1,667.70 an ounce at 1:46 p.m. on the Comex in New York. The price touched $1,662 yesterday, the lowest since Aug. 31. The metal is up 6.4 percent this year.
Silver futures for March delivery fell 1.7 percent to $31.116 an ounce in New York, after dropping to $31.085, the lowest since Nov. 6.
On the New York Mercantile Exchange, platinum futures for January delivery lost 0.1 percent to $1,592.90 an ounce, capping a third straight decline.
Palladium futures for March delivery climbed 1.1 percent to $698.35 an ounce.