Gold falls as US budget talks continue

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Associated Press

Posted on December 18, 2012 at 5:00 PM

Updated Tuesday, Dec 18 at 5:02 PM

The price of gold is lower on expectations that lawmakers are closer to an agreement on the U.S. budget.

Gold for February delivery fell $27.50 to $1,670.70 an ounce.

President Barack Obama and House Speaker John Boehner continued negotiations Tuesday. They have agreed to some concessions but are standing firm on other issues.

If they fail to reach an agreement before Jan. 1, tax increases and spending cuts will take place that economists say could harm the economy.

Analysts say a new budget will make it less likely that the Federal Reserve will have to take additional steps to promote the economy. Such measures typically benefit gold.

In other trading, prices are higher for oil, other energy products and wheat. Industrial metals, corn and soybeans are lower.

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