Gold prices flat as US fiscal worries
Gold traded little changed on Thursday below the 2- 1/2-week high hit in the previous session after U.S. President Barack Obama was re- elected, as a strong dollar largely put off buyers.
Obama's re-election gave markets a boost by ending weeks of political uncertainty, but now investors have shifted their focus to the fiscal cliff looming over the world's biggest economy: nearly $600 billion tax hikes and spending cuts which, if left unchanged, will begin in early 2013 and possibly bring back recession.
Worries about the fiscal cliff are supportive of safe-haven gold, but a strong dollar, which hit a two-month high against a basket of major currencies in the previous session, curbed bullion's gains by making it more expensive for buyers holding other currencies.
The dollar serves as a barometer of overall global risk, said Jeremy Friesen, commodity strategist at Societe Generale in Hong Kong.
Now the global risk has moved to centre on the U.S. and what it means for that barometer becomes a little messy and hard to tell. The dollar should weaken as the Fed offsets any slowdown, which I expect to be the end result, but in the near term if the market is nervous, it will bid up the dollar.
Spot gold was little changed at $1,716.74 an ounce by 0316 GMT, after rising to a 2- 1/2 week high of $1,731.40 the session before. U.S. gold inched up 0.2 percent to $1,717.10. Technical analysis suggested that spot gold looks neutral in the range
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