* Bullion also notches 2.3 pct weekly drop, biggest since
* Stalemate on U.S. budget deal triggers recession fears
* U.S. gold coins set for highest November sales since 1998
* Coming up: U.S. Markit manufacturing, ISM data Monday
(Adds market details, updates prices)
By Frank Tang
NEW YORK, Nov 30 Gold fell almost 1 percent on
Friday and posted its second consecutive monthly decline on
investor worries that the U.S. fiscal crisis might lead to a
recession and on end-of-month profit-making which prompted a
flurry of sell orders.
Bullion's drop accelerated after Speaker of the House John
Boehner said U.S. lawmakers from his Republican Party and
Democratic President Barack Obama are in a stalemate over a
budget deal needed to avoid a $600 billion "fiscal cliff" of
automatic tax hikes and spending cuts.
Some institutional investors lightened their gold holdings,
worried that failure to reach a budget deal could hurt economic
growth and undermine gold's appeal as an inflation hedge.
"There is a significant amount of industry selling in
anticipation of higher taxes related to the fiscal cliff," said
Frank McGhee, head precious metals trader at Integrated
Brokerage Services LLC.
"On the other hand, there is a fair amount of retail buying,
but in this case Wall Street tends to win," McGhee said.
Spot gold was down 0.8 percent at $1,711.30 an ounce
by 3:15 p.m. EST (2015 GMT). It notched a 2.3 percent weekly
drop, which would be its biggest weekly decline since June.
It also notched a 0.4 percent monthly loss for November,
after falling about 3 percent in October.
U.S. COMEX gold futures for February delivery settled
down $16.80 at $1,712.70. February becomes the benchmark
contract after December's first-notice day on Friday.
Trading volume was around 140,000 lots, about 25 percent
below its 250-day average, preliminary Reuters data showed.
Turnover was sharply lower after it hit a record high at 486,315
contracts on Wednesday, according to CME data.
Silver fell 2.7 percent to $33.29 an ounce.
GOLD COIN SALES UP IN NOVEMBER
In the retail sector, physical demand appeared strong.
November sales of U.S. American Eagle gold coins are set to
be the strongest in 14 years as uncertainty surrounding the U.S.
fiscal crisis and the presidential election triggered safe-haven
buying, dealers said.
Holdings of SPDR Gold Trust GLD, the world's biggest
gold-backed exchange-traded fund, stood at a record high of
1,347 tonnes, up nearly 11 tonnes in its fourth consecutive
month of gains.
Global gold demand in 2013 should be led by further strength
in Chinese demand and a recovery in India, helping the precious
metal continue its bull run into its 13th year, the
industry-backed World Gold Council said on Friday.
Among platinum group metals, concerns about supply and
technical buying helped send palladium to a 2-1/2 month high of
$689 on Thursday.
Norilsk Nickel, the world's largest producer of palladium
and nickel, expects the palladium market to remain in a deficit
for the next several years, largely due to a near depletion of
Russian state supplies.
Platinum fell 0.9 percent to $1,593.90, while
palladium dropped 0.7 percent to $677.22.
3:15 PM EST LAST/ NET PCT LOW HIGH CURRENT
SETTLE CHNG CHNG VOL
US Gold FEB 1712.70 -16.80 -1.0 1710.20 1733.70 131,938
US Silver MAR 33.279 -1.152 -3.3 33.215 34.425 49,331
US Plat JAN 1604.60 -14.90 -0.9 1596.00 1622.20 7,382
US Pall MAR 688.20 0.75 0.1 676.80 692.50 4,725
Gold 1711.30 -13.49 -0.8 1709.55 1731.50
Silver 33.290 -0.920 -2.7 33.180 34.340
Platinum 1593.90 -14.59 -0.9 1598.50 1618.00
Palladium 677.22 -4.50 -0.7 678.25 688.50
TOTAL MARKET VOLUME 30-D ATM VOLATILITY
CURRENT 30D AVG 250D AVG CURRENT CHG
US Gold 138,596 181,149 173,882 13.1 0.37
US Silver 54,915 57,012 52,416 20.65 -0.54
US Platinum 7,923 8,894 8,928 18.41 0.50
US Palladium 4,936 5,756 4,720
(Additional reporting by Jan Harvey and David Brough)