Gold edges higher on "fiscal cliff" concerns

Gold edges higher on concerns US lawmakers will fail to budget deal before year-end

Associated Press

NEW YORK (AP) -- Gold prices edged higher Thursday after Senate Majority Leader Harry Reid said that it appeared the government would miss the deadline for avoiding the "fiscal cliff."

The lawmaker's comments boosted demand for the metal as a safe haven, said Howard Wen a commodities analyst at HSBC.

February gold rose $3 to $1,663.70 an ounce, a gain of 0.2 percent. The metal had started the day lower before Reid's comments. Demand for gold was also bolstered by a report that showed consumer confidence fell to its lowest level since August.

The precious metal surged to a record last year as investors sought a safe haven when lawmakers failed to agree on a deal to lift the U.S. debt ceiling and the ratings agency Standard & Poor's cut its credit rating on the U.S. government's debt.

Gold has slumped 6.4 percent since the end of September and is on track to record its worst quarter in more than eight years. That's prompting speculation that the 12-year rally in the metal may be drawing to an end.

Other metals also advanced.

Silver for March delivery rose 20.50 cents to $30.24 an ounce, a gain of 0.7 percent. March copper gained 0.35 cents, or 0.1 percent, to $3.6010 a pound.

Energy trading was mixed.

The price of crude fell Thursday following the drop in consumer confidence and growing pessimism that political leaders in Washington can reach a budget deal. U.S. benchmark crude fell 11 cents to $90.87 a barrel in New York.

Natural gas prices fell 3.8 cents, or 1.1 percent, to end at $3.3540 per 1,000 cubic feet. Heating oil rose 2.10 cents to finish at $3.0723 a gallon. Wholesale gasoline gained 0.55 cents to end at $2.8213 a gallon

Grains extended their recent declines.

Wheat for March delivery fell 2.25 cents, or 0.3 percent, to $7.7225. March corn fell 1.75 cents, or 0.3 percent, to $6.9150 a bushel and soybeans for deliver in the same month fell 4.5 cents to $14.14 a bushel, a decline of 0.3 percent.

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