Investing.com - Gold prices dropped in U.S. trading on Thursday as investors priced in added Federal Reserve easing measures and sold on fears a budgetary impasse in the U.S. could up the chance of a recession, which stoked demand for the safe-haven dollar.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery were down 1.25% at USD1,696.45 a troy ounce in U.S. trading, up from a session low of USD1,690.85 and down from a high of USD1,713.55 a troy ounce.
Gold futures were likely to test support at USD1,685.75 a troy ounce, the low from Dec. 7, and resistance at USD1,724.75, Wednesday's high.
Gold shot up on Wednesday's news that the Federal Reserve will continue stimulating the U.S. economy Wednesday by adding an additional USD45 billion to its bond-buying program, a move that ups the total asset purchases from banks to USD85 billion a month, which weakens the dollar to fuel recovery.
Gold and the dollar trade inversely from one other.
Fiscal uncertainty in the U.S., however, sent the dollar gaining, which wiped out gold's rally.
The White House and Congressional Republicans continued to differ over how to narrow deficits and pay down debts as part of a budget agreement for 2013.
Democrats have been calling for tax hikes on top U.S. earners, while opposition Republicans have called more for capping tax deductions to increase revenue and cutting more spending elsewhere.
House Speaker John Boehner, an Ohio Republican, said earlier Thursday the White House wasn't taking his party's ideas serious, which spooked investors worldwide and wiped out demand for risk-on assets, including gold.
Sweeping tax hikes and deep budget cuts are scheduled to take effect at the end of this year, and failure to address them soon could tip the U.S. economy into a recession next year.
Elsewhere, the U.S. Commerce Department reported earlier that U.S. retail sales increased by 0.3% in November from October, whose rates contracted by 0.3%.
November's figures still missed market forecasts for a gain of 0.5%, which further stoked risk-off trading sentiments.
The Department of Labor, meanwhile, reported earlier the number of people filing for initial jobless claims fell by 29,000 to 343,000 last week, beating expectations for a decline of 2,000.
The previous week’s figure was revised up to 372,000 from 370,000.
Meanwhile, official data showed that producer price inflation in the U.S. fell 0.8% last month, compared to forecasts for a 0.5% decline.
Meanwhile on the Comex, silver for March delivery was down 3.90% and trading at USD32.463 a troy ounce, while copper for March delivery was down 1.45% and trading at USD3.662 a pound.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery were down 1.25% at USD1,696.45 a troy ounce in U.S. trading, up from a session low of USD1,690.85 and down from a high of USD1,713.55 a troy ounce.
Gold futures were likely to test support at USD1,685.75 a troy ounce, the low from Dec. 7, and resistance at USD1,724.75, Wednesday's high.
Gold shot up on Wednesday's news that the Federal Reserve will continue stimulating the U.S. economy Wednesday by adding an additional USD45 billion to its bond-buying program, a move that ups the total asset purchases from banks to USD85 billion a month, which weakens the dollar to fuel recovery.
Gold and the dollar trade inversely from one other.
Fiscal uncertainty in the U.S., however, sent the dollar gaining, which wiped out gold's rally.
The White House and Congressional Republicans continued to differ over how to narrow deficits and pay down debts as part of a budget agreement for 2013.
Democrats have been calling for tax hikes on top U.S. earners, while opposition Republicans have called more for capping tax deductions to increase revenue and cutting more spending elsewhere.
House Speaker John Boehner, an Ohio Republican, said earlier Thursday the White House wasn't taking his party's ideas serious, which spooked investors worldwide and wiped out demand for risk-on assets, including gold.
Sweeping tax hikes and deep budget cuts are scheduled to take effect at the end of this year, and failure to address them soon could tip the U.S. economy into a recession next year.
Elsewhere, the U.S. Commerce Department reported earlier that U.S. retail sales increased by 0.3% in November from October, whose rates contracted by 0.3%.
November's figures still missed market forecasts for a gain of 0.5%, which further stoked risk-off trading sentiments.
The Department of Labor, meanwhile, reported earlier the number of people filing for initial jobless claims fell by 29,000 to 343,000 last week, beating expectations for a decline of 2,000.
The previous week’s figure was revised up to 372,000 from 370,000.
Meanwhile, official data showed that producer price inflation in the U.S. fell 0.8% last month, compared to forecasts for a 0.5% decline.
Meanwhile on the Comex, silver for March delivery was down 3.90% and trading at USD32.463 a troy ounce, while copper for March delivery was down 1.45% and trading at USD3.662 a pound.