Are you interested in trading gold futures? You may want to know that they plummeted on December 20, as strong economic growth in the United States and progress in federal budget discussions pushed these contracts to their lowest value since August.
Plunging Gold Prices
Bloomberg reports that February gold futures fell to as low as $1,636.00 per ounce on the Comex division of the New York Mercantile Exchange, which was the lowest for these contracts since August 21. By 1:56 p.m., February Comex gold had pared its losses to trade at $1,645.90 an ounce.
Robust GDP
Market sentiment was bolstered by good news from the Commerce Department indicating that the U.S. gross domestic product (GDP) expanded at a rate of 3.1 percent during the third quarter, which was more than thought before.
"The GDP number was better than forecast, so the thinking is that improving conditions in the economy might mean a light at the end of the tunnel on when the Fed will end QE3," Phil Streible, a senior commodity broker at R.J. O’Brien & Associates in Chicago, told the news source during a telephone interview.
Fiscal Cliff Progress
Even though lawmakers failed to attain significant progress, markets pushed higher as House Speaker John Boehner stated that he will not let up in his efforts to resolve the budget disputes of Washington lawmakers, according to Reuters.
"Speaker Boehner went on the air and basically told us he doesn't like what the president's doing or not doing, and the markets rallied on that, which was kind of weird," Stephen Guilfoyle, a trader at Meridian Equity Partners in New York, told the news source.
A wide range of market observers have wanted a faster resolution, but lawmakers have kept everyone waiting by making very slow progress in their talks.
Failure to resolve the budget disputes could have a significant cost for the U.S. economy, and the nonpartisan Congressional Budget Office predicted earlier in the year that allowing it to happen would push the nation into recession in 2013.
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