Economic uncertainty chips away at gold prices
Uncertainty about U.S. budget talks is chipping away at gold prices.Gold fell $25.30, or 1.5 percent, to finish Tuesday at $1,695.80 an ounce. That's the lowest in a month.Republicans and Democrats remain far apart on their budget proposals with just weeks left before the U.S. reaches the "fiscal cliff." That refers to automatic tax increases and government spending cuts which will take effect Jan. 1. Economists believe those measures could send the U.S. back into a recession.The slow pace of the talks have left many investors and traders uncertain about putting money into commodities. If the U.S. economy slows, it could cut demand for industrial metals, oil and other raw materials. Some traders sold gold and other commodities to book profits while others are staying out of the market as they evaluate their portfolios ahead of the end of the year."I personally think it all comes down to the `fiscal cliff' right now," Kingsview Financial analyst Matt Zeman said. "That's what everybody is watching and for all practical purposes, our political leaders, from what I can tell, are still at a complete standstill."Many investors are looking ahead to Friday when the Labor Department will release employment data for November, which should offer more clues about the strength of the economy.Most commodities ended the day lower.March silver fell 95.1 cents, or 2.8 percent, to $32.808 per ounce, March copper was essentially flat at $3.6555 per pound, March palladium fell $8.55 to $682.70 per ounce and January palladium fell $30.90 to $1,582.90 per ounce.Benchmark oil fell 59 cents to $88.50 per barrel, heating oil dropped 5.22 cents to $3.004 per gallon, wholesale gasoline fell 3.75 cents to $2.689 per gallon and natural gas dropped 5.2 cents to $3.539 per 1,000 cubic feet.In March agricultural crop contracts, wheat fell 4.25 cents to finish at $8.565 per bushel, corn fell 2.75 cents to $7.52 per bushel and January soybeans rose 1.75 cents to $14.555 per bushel.