Gold Prices Flat as Fiscal Cliff Talks Go Silent
NEW YORK ( TheStreet) -- Gold prices were effectively unchanged Friday after a week that offered more Federal Reserve easing and uncertainty surrounding the so-called fiscal cliff in the U.S.
Gold for December February rose 20 cents to $1,697 an ounce at the Comex division of the New York Mercantile Exchange. The gold price traded as high as $1,701.90 and as low as $1,695 an ounce, while the spot price was shedding $2.30, according to Kitco's gold index.
"Today is basically Friday even out day for funds avoiding possible negative week end news," wrote George Gero, precious metals strategist at RBC Wealth Management, in a note. "
President Barack Obama, House Speaker John Boehner and Senate Majority Leader Harry Reid remained relatively quiet on Friday, but not before each of them used the media platform to state displeasure with the path of negotiations.
Reid's speech on Tuesday immediately rattled markets as the legislator said it would be "extremely difficult" to reach a deal before Christmas.
Obama's and Boehner's spokespeople have refused to provide the public with any details of the closed-door discussions they've held since the weekend. White House Press Secretary Jay Carney went so far as to say that he believed the best prospect for reaching an agreement was to not read to reporters details of the conversations between Obama and head lawmakers.
Gold prices gained on Monday in anticipation that the Fed would implement additional easing with the expiration of Operation Twist set for the end of the year.
But the central bank's decision to begin purchases of longer-term Treasury bonds at a rate of $45 billion per month, in addition to the $40 billion a month of mortgage-backed securities, didn't give the yellow metal the pop that many investors had anticipated. By Thursday, gold prices plummeted more than $20 on Fed Chairman Ben Bernanke's statement (after the new monetary policy announcement) that the central bank wouldn't be able to avert the United States from the fiscal cliff without action by legislators in Washington.
Silver prices for December delivery were rising 3 cents to $32.38 an ounce, while the U.S. dollar index was shedding 0.29% to $79.70.
Next week could provide another volatile period for gold prices as traders will anticipate whether politicians can reach some sort of an agreement on tax cuts and spending cuts before the holiday break. Though many analysts have suggested that a deal must be reached before legislators leave Capitol Hill to spend the break with their families, others have said we may see an agreement between Christmas and the new year.