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Gold Prices Plunge Amid 'Fiscal Cliff' Talks

Tuesday, 18 Dec 2012 | 3:34 PM ET

Gold prices have plunged to a nearly four-month low, declining more than $30 to an intraday low of $1,662 an ounce in the midst of U.S. "fiscal cliff" talks.

The dramatic drop in gold prices began late morning as House Speaker John Boehner outlined a "Plan B" tax proposal. Gold prices declined further after White House Press Secretary Jay Carney announced President Obama's rejection of that plan. February gold futures settled at $1,670.70 an ounce.

Gold Drops to 6-Week Low
Gold fell off a cliff and has remained near session lows, reports CNBC's Sharon Epperson.

After the close of floor trading, gold prices continued to slide to $1,662 an ounce, falling below the 200-day moving average of $1,667 an ounce. Comex floor traders say many sell stops were triggered in the decline below key technical levels, exacerbating the slide.

RBC Capital Markets precious metals analyst George Gero said sellers were also "spooked" by China's cancellation of large soybeans orders, a possible indication of a further slowdown in growth there.

Gold is now on pace for its third monthly decline, down almost 6 percent in that period. (Read More: The World's Biggest Gold Reserves.)

Still, gold is one of the better performing commodities in 2012, up 7 percent this year and on track for its 12th consecutive annual gain. Some analysts remain very bullish on the metal. Bank of America Merrill Lynch analyst Francisco Blanch told CNBC earlier Tuesday he expects gold prices to reach $2,000 an ounce next year.

—By CNBC's Sharon Epperson; Follow her on Twitter: @sharon_epperson

Disclaimer

Featured

  • Patti Domm

    Patti Domm is CNBC Executive Editor, News, responsible for news coverage of the markets and economy.

  • A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

  • Sharon Epperson is CNBC's senior commodities and personal finance correspondent.

  • JeeYeon Park is a writer for CNBC.com. Follow her on Twitter: @JeeYeonParkCNBC

  • Rick Santelli joined CNBC Business News as an on-air editor in 1999, reporting live from the floor of the Chicago Board of Trade.

  • Senior Producer at CNBC's Breaking News Desk.

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