Gold News & Info

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold fell nearly 1% after negotiations stalled on the so-called fiscal cliff, undermining risk appetite. House Speaker John Boehner declared "a stalemate," increasing the possibility that some $600 billion in spending cuts and tax increases will be triggered automatically beginning on January 1, potentially driving the economy back into recession. U.S. equities were flat and the dollar rallied, hitting a six-month high against the yen after Japan approved another round of monetary stimulus. Fiscal-cliff worries are spurring foreign central banks to increase their holdings of U.S. Treasuries and agency bonds, bidding up the dollar and suppressing the gold price, which fell 0.5% for the month. Silver tumbled 3.4% for the day but pulled out a 3% monthly gain. Platinum dropped 0.9% today but gained 1.7% for the month. And palladium, benefiting from strikes and supply shortages, inched up 0.1% today but added a whopping 13% this month.

At the Comex close: February gold dropped $16.80 to $1,712.70; March silver lost $1.15 to $33.28; January platinum futures fell $14.90 to $1,604.60; and March palladium added 75 cents to end at $688.20 an ounce;

With the game of chicken on the fiscal cliff expected to continue until the last moment, hedge funds and other large speculators have reduced their bets on paper gold in case the stalemate undermines growth and reduces demand for inflation-hedges. Physical demand by individual investors, however, remains solid. The U.S. Mint sold 136,500 ounces of American Eagle gold bullion coins in November, the highest monthly total since July 2010 and more than twice as much as October. And holdings in SDDR Gold Trust, the world's largest bullion-backed ETF, added 11 tonnes in November to stand at a record high of 1,347 tonnes, according to Reuters.