Investing.com - Gold prices fell in Asian trading on Wednesday after investors looked beyond Greece's recent funding deal and towards the U.S., where weeks remain until tax hikes and deep spending cuts take effect with the close of this year.
The combination of rising taxes and cuts to government spending converging at once, known as a fiscal cliff, could send the U.S. into a recession next year if Congress fails to address it.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery were down 0.11% at USD1,742.85 a troy ounce, up from a session low of USD1,742.75 and down from a high of USD1,745.55 a troy ounce.
Gold futures were likely to test support at USD1,720.25 a troy ounce, Wednesday's low, and resistance at USD1,754.65, Monday's high.
Fears U.S. lawmakers are running out of time to steer the country away from the fiscal cliff suppressed appetite for risk and sent investors chasing the dollar, which normally trades inversely from gold.
The nonpartisan Congressional Budget Office has said failure to deal with the fiscal cliff could send the economy contracting by 0.5% in 2013.
Earlier, U.S. Senate Majority Leader Harry Reid, a Democrat allied with President Barack Obama, said he was disappointed over the progress of fiscal reform talks with his Republican counterparts.
Democrats and Republicans remain at odds over tax hikes, with the former clamoring for the Bush-era tax breaks to expire for the wealthy to drum up fresh government revenue, and the latter countering that such a move would hit small businesses and force them to put off investing and adding payrolls.
Spending cuts have drawn contrasting points of view as well.
U.S. fiscal uncertainty wiped out appetite for risk stemming from Greece's recent rescue funding deal.
EU and IMF officials agreed on a proposal for Greece to cut its debt to 124% of gross domestic product by 2020 in exchange for fresh aid payments, EUR34.4 billion of which will flow into the country's coffers in December, which allayed default fears.
Appetite risk also fell on concerns that the deal still won't resolve underlying problems in Greece and elsewhere in Europe of too much debt and too little growth, which continues to fuel the debt crisis.
Trading was choppy due to solid U.S. economic indicators.
U.S. consumer confidence rose to its highest level since February 2008 in November, industry data showed on Thursday.
The Conference Board, a market research group, reported earlier that its index of consumer confidence rose to 73.7 in November from a reading of 73.1 in October, whose figure was revised up from 72.2.
Analysts had expected the index to decline to 73.0 in November.
Elsewhere, the U.S. Census Bureau reported that core durable goods orders, which exclude volatile transportation items, rose by a seasonally adjusted 1.5% in October, far outpacing market calls for a 0.5% decline.
The report also showed that total orders for durable goods were unchanged last month compared to expectations for a 0.6% decline.
Separately, the Standard & Poor's/Case-Shiller home price index rose at an annualized rate of 3.0% in September from a year earlier, beating expectations for a 2.9% increase.
Elsewhere on the Comex, silver for March delivery was down 0.15% and trading at USD34.023 a troy ounce, while copper for March delivery was up 0.08% and trading at USD3.551 a pound.
The combination of rising taxes and cuts to government spending converging at once, known as a fiscal cliff, could send the U.S. into a recession next year if Congress fails to address it.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery were down 0.11% at USD1,742.85 a troy ounce, up from a session low of USD1,742.75 and down from a high of USD1,745.55 a troy ounce.
Gold futures were likely to test support at USD1,720.25 a troy ounce, Wednesday's low, and resistance at USD1,754.65, Monday's high.
Fears U.S. lawmakers are running out of time to steer the country away from the fiscal cliff suppressed appetite for risk and sent investors chasing the dollar, which normally trades inversely from gold.
The nonpartisan Congressional Budget Office has said failure to deal with the fiscal cliff could send the economy contracting by 0.5% in 2013.
Earlier, U.S. Senate Majority Leader Harry Reid, a Democrat allied with President Barack Obama, said he was disappointed over the progress of fiscal reform talks with his Republican counterparts.
Democrats and Republicans remain at odds over tax hikes, with the former clamoring for the Bush-era tax breaks to expire for the wealthy to drum up fresh government revenue, and the latter countering that such a move would hit small businesses and force them to put off investing and adding payrolls.
Spending cuts have drawn contrasting points of view as well.
U.S. fiscal uncertainty wiped out appetite for risk stemming from Greece's recent rescue funding deal.
EU and IMF officials agreed on a proposal for Greece to cut its debt to 124% of gross domestic product by 2020 in exchange for fresh aid payments, EUR34.4 billion of which will flow into the country's coffers in December, which allayed default fears.
Appetite risk also fell on concerns that the deal still won't resolve underlying problems in Greece and elsewhere in Europe of too much debt and too little growth, which continues to fuel the debt crisis.
Trading was choppy due to solid U.S. economic indicators.
U.S. consumer confidence rose to its highest level since February 2008 in November, industry data showed on Thursday.
The Conference Board, a market research group, reported earlier that its index of consumer confidence rose to 73.7 in November from a reading of 73.1 in October, whose figure was revised up from 72.2.
Analysts had expected the index to decline to 73.0 in November.
Elsewhere, the U.S. Census Bureau reported that core durable goods orders, which exclude volatile transportation items, rose by a seasonally adjusted 1.5% in October, far outpacing market calls for a 0.5% decline.
The report also showed that total orders for durable goods were unchanged last month compared to expectations for a 0.6% decline.
Separately, the Standard & Poor's/Case-Shiller home price index rose at an annualized rate of 3.0% in September from a year earlier, beating expectations for a 2.9% increase.
Elsewhere on the Comex, silver for March delivery was down 0.15% and trading at USD34.023 a troy ounce, while copper for March delivery was up 0.08% and trading at USD3.551 a pound.