Economic uncertainty chips away at gold prices

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Associated Press

Posted on December 4, 2012 at 2:01 PM

Updated Tuesday, Dec 4 at 2:02 PM

Uncertainty about U.S. budget talks is chipping away at gold prices.

Gold fell 1.5 percent to finish Tuesday at $1,695.80 an ounce. That's the lowest in a month.

Republicans and Democrats remain at odds over the budget. Automatic tax increases and government spending cuts take effect Jan. 1 unless they reach an agreement. Economists believe those measures could send the U.S. back into a recession.

Investors are unsure about putting money into commodities. If the U.S. economy slows, it could cut demand for industrial metals, oil and other raw materials. Some are selling contracts for a profit while others are just staying out of the market.

In other trading, prices are lower for industrial metals, oil, wheat and corn. Soybeans are higher.

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