PRECIOUS-Gold hits 3-week peak on U.S. fiscal fears
By David Brough
LONDON, Nov 9 (Reuters) – Gold hit a three-week high on Friday, boosted by expectations U.S. monetary policy would remain loose after President Barack Obama’s re-election and a looming “fiscal cliff” that could slash U.S. public spending.
Since the U.S. elections on Tuesday investors have become worried that Washington’s politicians may struggle to find a compromise to cut the budget deficit before nearly $600 billion worth of spending cuts and tax increases kick in early in 2013.
Markets are also watching the debt ceiling, which needs to be raised to avoid a government shutdown.
Spot gold was at $1,732.09 an ounce by 1150 GMT, up 0.12 percent, having earlier touched a three-week peak of $1,737.60, while U.S. gold edged up 0.39 percent to $1,732.70.
A stronger dollar offset further upside in gold by making the yellow metal more costly in other currencies.
Gold prices hit a 2-1/2 week high on Wednesday after Obama’s re-election gave markets a boost by ending weeks of political uncertainty, and since extended gains to the three-week peak as concerns over the fiscal cliff intensified.