PRECIOUS-Gold slips on U.S. budget woes, but yen lifts TOCOM

Tue Dec 25, 2012 8:14pm EST

SINGAPORE, Dec 26 (Reuters) - Gold edged lower on Wednesday
on uncertainty over whether the United States will avoid a
fiscal crisis, although a weaker yen sparked a rally in Tokyo
bullion futures. 
      
    FUNDAMENTALS
    * Gold had dropped $5.73 an ounce to $1,652.56 by
0056 GMT, off a 4-month low struck last week. The yellow metal
is still on track for a 12th straight year of gains on
rock-bottom interest rates, concerns over the financial
stability of the euro zone, and diversification into bullion by
central banks.
    * With the year-end deadline for the U.S. to go over a
"fiscal cliff" approaching, lawmakers played a waiting game on
Monday in the hope that someone will produce a plan to avoid
harsh budget cuts and higher taxes for most Americans from New
Year's Day. 
    * Congress is expected to return to Washington on Thursday
as President Barack Obama returns from a trip to Hawaii.
 
     * U.S. gold futures for February slipped $6.00 an
ounce to $1,653.50.     
      * Gold contracts on the Tokyo Commodity Exchange (TOCOM),
which often influence movements in spot gold, rose after the yen
dropped to a 20-month low against the dollar on growing hopes
for further monetary easing in Japan. <0#JAU:>
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    MARKET NEWS
    * Expectations that Japan's incoming prime minister will
pursue drastic stimulus policies to drive the country's economy
out of deflation helped weaken the yen and underpinned the
Nikkei on Wednesday, while Asian shares were capped in thin
holiday trade. 
    * U.S. crude futures edged up to around $89 a barrel on
Wednesday. 
     
    DATA/EVENTS (GMT) 
    1245 - ICSC/Goldman Sachs Weekly U.S. Chain store sales
    1355 - Redbook Weekly U.S. retail sales
    1400 - U.S. S&P/Case-Shiller home price index for October
    1500 - Richmond Fed Manufacturing, Services index for Dec
    1130 - India M3 Money Supply 
   
    PRICES
  
  Precious metals prices 0056 GMT
  Metal             Last    Change  Pct chg  YTD pct chg    Volume
  Spot Gold        1652.56   -5.73   -0.35      5.68
  Spot Silver        29.94    0.08   +0.27      8.13
  Spot Platinum    1544.24   14.74   +0.96     10.86
  Spot Palladium    686.00    4.00   +0.59      5.13
  COMEX GOLD FEB3  1653.50   -6.00   -0.36      5.53         3223
  COMEX SILVER MAR3  30.00    0.10   +0.34      7.47          393
  Euro/Dollar       1.3178
  Dollar/Yen         85.28
     
    

 (Reporting by Lewa Pardomuan; Editing by Joseph Radford)
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