GO
Loading...

Gold ends near $1,257 after 3-day rise; anticipating Fed

Wednesday, 11 Dec 2013 | 2:53 PM ET
AP

Gold prices settled lower on Wednesday after a three-day rally driven by investors short-covering, as a tentative U.S. budget deal supported expectations for an earlier reduction in U.S. monetary stimulus.

The bipartisan budget deal announced in the U.S. Congress on Tuesday is expected to end three years of impasse and fiscal instability in Washington that culminated in October with a partial government shutdown.

"The budget agreement in Congress is removing some of the uncertainty that potentially persuaded the Fed not to taper back in October when they had the chance,'' Saxo Bank's head of commodity strategy Ole Hansen said.

Spot gold was down 0.6 percent to $1,253 an ounce, having hit its highest in three weeks on Tuesday. U.S. gold futures for February settled $3.90 lower at $1,257.20 an ounce.

  Name Price   Change %Change Volume
GOLD
---
GOLD/USD
---
SILV/USD
---
SILVER
---
PALL/USD
---
PLAT/USD
---

Trading has been volatile over the past week, with a short-covering rally following a slide in prices to a five-month low last week on better-than-expected U.S. employment data.

The jobs report fueled expectations that the Federal Reserve was soon to taper its bullion-friendly quantitative easing program.

However some analysts said the market was becoming less sensitive to speculation about the timing and speed of tapering by the Fed.

"There's a little bit of taper fatigue coming in. Gold has been jumping around (with) the taper talk now for the last six months,'' Hansen said.

"A lot so far has been priced in to the market...we've been speculating on the 'when' and 'if' (of tapering) but the market is probably in the situation now that it wants to see the actual facts,'' Hansen said.

For more information on precious metals, please click here.

  Price   Change %Change
Gold
---