|Chennai||Rs. 27770.00 (-0.14%)|
|Mumbai||Rs. 29200.00 (2.31%)|
|Delhi||Rs. 27900.00 (-0.36%)|
|Kolkata||Rs. 28270.00 (1%)|
|Kerala||Rs. 27050.00 (-0.37%)|
|Bangalore||Rs. 27550.00 (1.66%)|
|Hyderabad||Rs. 27770.00 (-0.14%)|
Gold eased on Thursday from the prior session's two-week peak as the dollar strengthened and oil prices fell, with investors focusing on coming U.S. budget talks after euphoria over a vote to avert a fiscal crisis faded.
A global stock market rally petered out on Thursday as investors began worrying about likely future U.S. political battles over spending cuts.
Spot gold was at $1,681.1 by 1114 GMT, down 0.31 percent, having touched a two-week peak above $1,694 in the previous session. U.S. gold futures for December delivery were down $7.0 an ounce at $1,681.80.
The precious metal made a strong start to the year along with other financial assets, with commodities hitting multi-week highs on Wednesday, after the U.S. Congress passed a bill to avert an approaching fiscal crisis.
Lawmakers opted to raise taxes on wealthy individuals and families, but left unresolved another sticky issue involving $109 billion in planned spending cuts, promising more political showdowns on the budget in coming months.
"The deal to avoid a fiscal cliff has booted some problems into the long grass by a considerable distance, but there are still issues out there such as expanding the debt ceiling, which could prove to be difficult negotiations," said David Jollie, strategic analyst at Mitsui Precious Metals.
He said that gold had been swept up in a relief rally of financial assets and commodities after the deal to avert the fiscal cliff, but that this had lost momentum on Thursday.
The euro fell more than one percent against the yen as investors booked profits and sold riskier and growth-linked currencies on concerns about the prospect of more U.S. budget negotiations in coming weeks.
Technical analysts at ScotiaMocatta said gold's rise back above a key retracement level at $1,695 an ounce on Wednesday had led to an improved chart picture for the metal.
"The break of $1,685 has shifted our view from bearish to neutral," they said. "(We) see support now at $1,679 and $1,670, with resistance at $1,695 and $1,708."
HEADWINDS FOR GOLD
Gold ended up around 7 percent in 2012, the twelfth straight year of gains, but faces headwinds this year after posting its worst quarterly performance in more than four years in the last three months of 2012.
Bank Credit Suisse cut its gold price forecasts for 2013 to $1,740 an ounce on Thursday from $1,840 previously, and said in a report that the end of the bull market was in sight.
"A more stable financial environment and improving global growth is likely to see investor demand for defensive assets fade and the market turn lower by Q4," it said. "We do not forecast a bursting bubble collapse in price, more a slow puncture."
Premiums for gold bars were steady in Singapore at $1.10 to$1.20 an ounce to the spot London prices as supply had yet to recover after the Christmas and New Year holidays. Buyers from India, historically the top consumer, were on the sidelines.
India's finance minister said on Tuesday he was looking at further curbs on gold imports to help rein in a current account gap that touched an all-time high in the July-September quarter.
"Physical gold demand may be negatively affected in the next few months by the fact that the Indian government is considering raising duties on gold imports even further," Commerzbank said in a note.
"The aim is to tackle the country's record-high current account deficit, for which - according to India's central bank - gold imports are roughly 80 percent to blame."
The Istanbul Gold Exchange reported on Thursday that Turkey's gold imports rose by 57 percent last year to 120.78 tonnes from 79.7 tonnes in 2011.
Among other precious metals, silver was down 0.16 percent to $30.92 an ounce, while platinum firmed 0.11 percent to $1,562.24 and palladium dipped 0.20 percent to $700.97 an ounce.