Gold futures ended Friday’s session below the key USD1,700-level, little changed on the day, as market players continued to monitor negotiations among U.S. lawmakers to avoid the looming “fiscal cliff” crisis.
On the week, gold futures retreated 0.5%, the third consecutive weekly decline.
Gold prices were likely to find support at USD1,685.75 a troy ounce, and resistance at USD1,724.75 a troy ounce.
Investors continued to monitor developments surrounding the fiscal cliff in the U.S., approximately USD600 billion in automatic tax hikes and spending cuts due to come into effect on January 1, unless a divided Congress and the White House can work out a compromise in the two weeks left before the deadline.
President Barack Obama said recently that any solution must include spending cuts and raising revenue, including increasing taxes on the wealthiest.
Republican leaders say they will agree to higher revenue, but they want to close loopholes or reduce tax breaks rather than raise rates.
Without a deal, the U.S. could fall back into recession and drag much of the world down with it.
Federal Reserve Chairman Ben Bernanke warned Wednesday that the central bank does not have the ability to “offset the full impact of the fiscal cliff”.
The comments came after the Fed said it would continue to purchase USD85 billion a month of government bonds and mortgage based securities in order to shore up the economic recovery.
Meanwhile, in China, a report showed that manufacturing activity expanded at the fastest pace in 14-months in December. China’s preliminary HSBC manufacturing PMI rose to 50.9, up from a final reading of 50.5 in November.
Elsewhere on the Comex, silver for March delivery eased down 0.1% on Friday to settle the week at USD32.33 a troy ounce, the lowest level since November 16.
On the week, silver futures dropped 2.4%, the third consecutive weekly decline.
Meanwhile, copper for March delivery added 0.5% Friday to close the week at USD3.679 a pound. On Wednesday, New York-traded copper futures hit a six-week high of USD3.720 a pound.
Copper prices rose 0.35% on the week, the fifth consecutive weekly gain.
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