Gold and Other Commodities Fall Overnight as Cliff Talks Hit Pitfalls

“Gold fell to a four-week low in London, dropping below $1,700 an ounce, as a stalemate in U.S. budget talks weighed on commodities.

Commodities retreated for the first time in four days as talks over the so-called fiscal cliff of spending cuts and tax increases remained deadlocked. European Union finance ministers meet in Brussels today to discuss measures to stem the debt crisis. Bullion pared some losses as the dollar reached a six- week low versus the euro.

“It’s more the risk aversion out of commodities which is probably having an impact on gold,”Peter Fertig, the owner of Quantitative Commodity Research Ltd. in Hainburg, Germany, said today by phone. Still, “there are arguments investors should buy gold on worries the U.S. economy could fall over the fiscal cliff,” he said, citing demand for a haven investment.

Gold for immediate delivery dropped 0.6 percent to $1,705.39 an ounce by 11:09 a.m. in London. Prices reached $1,696.78, the lowest since Nov. 6. Gold for February delivery was 0.8 percent lower at $1,706.80 on the Comex in New York.”

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