December 17, 2012 / 4:06 AM / 5 years ago

PRECIOUS-Gold edges down; extends losses to third day

* US Republican lawmaker John Boehner offers to increase tax
    * Trading flows slow before year-end
    * Coming Up: U.S. NY Fed Empire State survey, Dec; 1330 GMT

 (Adds detail, comment; updates prices)
    By Rujun Shen
    SINGAPORE, Dec 17 (Reuters) - Gold edged lower on Monday,
extending losses to a third straight session, as trade slowed
ahead of the year-end holidays and investors showed little
response to the latest progress in U.S. budget talks.
    U.S. House of Representatives Speaker John Boehner's offer
to accept a tax rate increase for the wealthiest Americans
removes a key Republican road block to a deal resolving the
year-end "fiscal cliff". 
    But there is no imminent sight of an agreement, as President
Barack Obama will face stiff Democratic opposition to cuts in
entitlement spending. 
    Gold barely responded to the news, and moved in a narrow
range below $1,700 an ounce, after falling for the third
straight week, despite a fresh bond buying scheme announced by
the Federal Reserve last week.
    "Participation is really low right now," said a Hong
Kong-based trader. "It hasn't been a very exciting year for most
people and I don't think they want to stick around for the last
week and a half. People want to put away everything before
starting on a totally clean slate in 2013."
    Spot gold had inched down 0.3 percent to $1,689.50 an
ounce by 0720 GMT, after falling nearly half a percent in the
previous week. U.S. gold lost 0.4 percent to $1,690.90.
    In the currency market, the yen slumped to its lowest
against the dollar in more than a year and a half after Japan's
conservative Liberal Democratic Party won the Sunday election,
with investors expecting aggressive monetary easing from the new
    "The medium-term trend is a weaker yen versus the dollar,
which gives investors in gold and platinum some comfort as a
weaker yen means higher prices," said Yuichi Ikemizu, head of
commodity trading for Japan at Standard Bank.
    Hedge funds and money managers raised their bullish bets on
U.S. gold futures and options to 129,865 contracts in the week
ended Dec. 11, up from a more than three-month low of 126,073
lots in the previous week. 
    But they cut net length in silver to 34,862 lots, the lowest
since late November. 
    Spot silver was little changed at $32.17, after
earlier falling to a one-month low of $32.13, just below its
100-day moving average at $32.14.
    Spot palladium lost 0.6 percent to $696, after rising
for seven weeks straight, its longest winning streak in more
than two years. 
   Precious metals prices 0720 GMT
  Metal             Last    Change  Pct chg  YTD pct chg    Volume
  Spot Gold        1689.50   -5.59   -0.33      8.04
  Spot Silver        32.17    0.02   +0.06     16.18
  Spot Platinum    1604.74   -9.26   -0.57     15.20
  Spot Palladium    696.00   -4.00   -0.57      6.67
  COMEX GOLD FEB3  1690.90   -6.10   -0.36      7.92        22494
  COMEX SILVER MAR3  32.25   -0.05   -0.15     15.53         6251
  Euro/Dollar       1.3156
  Dollar/Yen         83.96
  COMEX gold and silver contracts show the most active months

 (Editing by Clarence Fernandez and Joseph Radford)

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