Gold’s three day rally came to a halt as the agreement on a deal over the US Budget was seen as a further incentive for the US Federal Reserve to start tapering next week.
Spot gold was trading around US$5 lower at US$1,257 early in US trading, having pushed ahead strongly since Friday afternoon as traders covered short positions after last week’s non-farm payroll data.
Next week sees the Federal Reserve meet to decide on whether to rein back its US$85bn bond buying programme.
Gold has been under pressure all through 2013 on concerns that the Fed would start to cut back, which has been most apparent in the reduction of holdings in exchange traded funds (ETFs).
SPDR Trust, the largest of the gold-backed funds, has seen a third of its holdings flow out this year and yesterday they were at the lowest level since early 2009.
Platinum was flat today even though one of the major unions, the AMCU, has been given permission to call a strike at Lonmin’s mines.
A decision on whether to take industrial action will be taken next year. The permission, which means workers who go out cannot be sacked, means the AMCU now has permission to strike Anglo American, Lonmin and Impala.
Lonmin’s Marikana mine was the scene of the worse of the industrial unrest in South Africa’s platinum industry last year, with dozens killed when the police opened fire on one demonstration.
Silver was flat at US$20.40.
Major movers
Randgold Resources down 67p at 4,076p
Fresnillo up 2.5p at 758p
Anglo American down 17p at 1,299p