Amid low volume trading during Asian trading hours, gold prices slipped slightly as bullion investors eagerly wait to see whether congressional leaders, following a short Christmas break, succeed in finding some quick-solution concerning fiscal crisis, once negotiations start form Thursday. Silver prices, meanwhile, edged higher in early trading on Wednesday.
At last check, gold futures for February delivery inched down 0.05 to $1,657.70 an ounce while spot gold also slipped 0.05 percent to $1,657.81 an ounce.
According to the White House, President Obama has decided to cut short his Christmas vacation as he looks to head towards Washington for addressing the unresolved issue of fiscal crisis.
Congressional leaders left for Christmas vacation on Friday with talks over fiscal crisis lying in indeterminate state.
If no deal is made before the January 1 deadline then series of automatic spending cuts and tax hikes estimated in the range of $500 to $600 billion will set-off. According to Congressional Budget office, the U.S. economy will plunge into recession in case lawmakers fail in averting the economy falling off the cliff. Accordingly, edgy investors are keeping in sidelines.
While equity markets have been jittery, inflation hedge bets have also dried out as yearend profit booking from hedge funds and gold’s tendency to track riskier assets in the recent past weighed on bullion investors’ mind.
Speaking to Reuters, Yuichi Ikemizu, branch manager for Standard Bank in Tokyo, said, “I am still friendly with the market but it looks like until the new year starts, it's under pressure from, probably, long liquidation.” Ikemizu also pointed out that global investors will closely watch the progress made in Washington with regard to fiscal cliff crisis.
Meanwhile, in physical market side, demand from Asia picked up as dealers and Jewelers looked to capitalize on near four month low prices.
Silver futures gained 0.28 percent to $28.98 an ounce.
In pre-market trading, the iShares Silver Trust (ETF) (NYSE: SLV
) was down 0.03%.