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

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.