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Gold Futures Decline as Commodities Drop on Budget Talks Impasse

Dec. 24 (Bloomberg) -- Gold futures declined as a stalemate in U.S. budget talks drove commodities down. Silver and platinum also retreated.

The Standard & Poor’s GSCI Spot index of 24 commodities slipped as much as 0.4 percent. Time is running out for U.S. lawmakers and President Barack Obama to agree on a budget deal by year-end to avoid triggering more than $600 billion in tax increases and spending cuts, Senator Joseph Lieberman said.

“There is very little time left to avert the situation,” Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago, said in a telephone interview. “People are getting increasingly worried that we may slip into recession.”

Gold futures for February delivery declined 60 cents to settle at $1,659.50 an ounce at 12:37 p.m. on the Comex in New York. Prices slumped 2.2 percent last week, the biggest weekly loss since November.

Holdings in gold-backed exchange-traded products fell 1.6 metric tons from a record to 2,630.9 tons on Dec. 21, data compiled by Bloomberg show. Gold prices are set for a 12th consecutive annual gain as central banks from the U.S. to China pledge more steps to spur economic growth.

Silver futures for March delivery lost 1 percent to $29.897 an ounce on the Comex.

On the New York Mercantile Exchange, platinum for April delivery slid 0.1 percent to $1,538.90 an ounce. Palladium for March delivery rose 0.3 percent to $684.55 an ounce.

To contact the reporter for this story: Debarati Roy in New York at droy5@bloomberg.net

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net

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