Gold slips as focus on new budget talks lifts dollar
World shares struggled for traction on Thursday as investors grew concerned about new political battles looming in Washington over spending cuts, following Wednesday's rally on the back of a deal to avoid the so-called "fiscal cliff".
Spot gold was at $1,678.46 by 1446 GMT, down 0.48 percent after having touched a two-week peak above $1,694 in the previous session. U.S. gold futures for December delivery were down $9.80 an ounce at $1,679.00.
An ADP National Employment Report, which showed private sector employers added more jobs than expected in December, undermined the safe-haven appeal of U.S. government debt on Thursday and added pressure to gold, analysts said.
Gold's gains have been driven largely by successive rounds of U.S. quantitative easing, which have kept pressure on long-term interest rates and fuelled fears of inflation. Any further easing measures have been explicitly tied to jobs growth.
"You could argue that the U.S. is creating jobs - and that is another sign that the U.S. economy is in recovery mode," Daniel Briesemann, an analyst with Commerzbank in Germany. Closely watched U.S. non-farm payrolls data due on Friday is expected to show the economy added 150,000 jobs last month, after adding 146,000 in November.
Briesemann said that after the relief over the U.S. deal to avoid a fiscal crisis, financial markets were
Be the first to comment.