Fundamental Analysis Commodities
November 30, 2012 @ 9:17 pm

Gold ends week lower

Gold ended the week lower, after dropping 2.6 percent from a high of $1,751 down to $1,705. Just on Friday prices dropped nearly $17 an ounce, as the precious metal is hurt by uncertainty over the fiscal cliff. Washington’s negotiations continue to influence investor sentiment.

The “gold market is concerned there will not be a solution” to the fiscal cliff. Meanwhile the stronger dollar is pressuring bullion. The two assets usually have an inverse price relationship. So gold priced in USD will fall if the dollar rises.

On Thursday prices fell by over $30 after comments by US House of Representatives Speaker John Boehner that there was a lack of progress in the talks. Boehner said there is a stalemate between Republicans and President Barack Obama’s administration. He also said Obama’s proposal of $1.6 trillion in new tax revenue and less than $400 billion in spending cuts was not “serious.”

Prices attempted a recovery to $1,731 but fell back down again on Friday. The gold market will continue to be driven by fiscal-cliff talks next week.

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