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Gold Proves It Lost Safe Haven Appeal

December 4, 2012 at 23:22 by Vladimir Vyun

Gold dropped today amid fears of the fiscal cliff in the United States. Four weeks remained before $600 billion in tax increases and spending cuts will be triggered if President Barack Obama and Republicans would not reach a compromise. Economists are concerned that such an outcome may result in recession.

Twenty-one of 24 raw materials, tracked by the Standard & Poor’s GSCI Index, declined today. Previously, gold was considered a safe asset and could profit from the fears. Nowadays, it behaves more like a common raw material, falling like all other commodities among uncertainty and pessimism.

Gold dropped from $1,710.33 to $1,697.05 per troy ounce as of 23:11 GMT on COMEX today, while its daily minimum was at $1,691.20. Silver was down from $33.32 to $32.82 per ounce and its daily low was at $32.62.

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