Gold today declined for a third day as the dollar’s strength dampened demand for alternative investments, countering record holdings in exchange-traded products.
Gold fell 0.4 per cent to 1,689.85 dollar an ounce and silver lost as much as 0.5 per cent to $32.10 an ounce, the least expensive since November 16.
Gold has fallen 1.5 per cent in December, poised for a third monthly loss. It dropped 10 per cent in December 2011.
Bullion increased 8.1 per cent this year as central banks from the US to China and Europe took action to prop up economies, debasing currencies and increasing haven demand.
US House Speaker John Boehner offered to raise income tax rates for high earners in exchange for containing the cost of federal entitlement programs, as part of a deal with President Barack Obama to avert the so-called fiscal cliff in automatic tax increases and spending cuts due to take effect in January.
The dollar strengthened against a six-currency basket after Shinzo Abe’s victory in Japan’s general election increased expectations that the central bank will add to stimulus.
Holdings in ETPs expanded 12 per cent this year to 2,630.703 tonnes.