Gold declined from a record in New York on optimism that Congress will pass a compromise to raise the US debt limit and prevent a default, curbing demand for the metal as an investment heaven. Leaders of both parties agreed on a plan to raise the debt ceiling by at least $2.1 trillion, President Barack Obama said Sunday. The House plans votes today on the agreement and the Senate may follow. “Gold is lower on the debt deal,” Tom Pawlicki, an analyst at MF Global Holdings Ltd. in Chicago, said Monday. Gold futures for December delivery fell $9.50, or 0.6 percent, to close at $1,621.70 an ounce at 1:48 P.M. on the Comex in New York. The price climbed to a record $1,637.50 on July 29. “There still remains some pessimism that the deal could fall at the last hurdle,” James Moore, an analyst at TheBullionDesk.com in London, said in a report. “But given the scale of gains posted in recent weeks, the yellow metal is vulnerable to a deeper correction should the deal be given full approval.” Gold has gained 14 percent this year as debt woes escalated in the US and Europe and amid signs of a faltering global economy. Manufacturing indexes from Asia to the US fell in July as demand weakened. Silver futures for September delivery fell 79.7 cents, or 2 percent, to $39.309 an ounce on the Comex. Palladium futures for September delivery rose $1.80, or 0.2 percent, to $829.50 an ounce on the New York Mercantile Exchange. Platinum futures for October delivery added $9.30, or 0.5 percent, to $1,794.60 an ounce on the Nymex. “It's risk-off at the moment. The fact that gold hit an all-time high Friday and is off today reflects the mood that the risk (of a US default) has diminished over the course of the weekend,” said Ross Norman of Sharps Pixley. “This (plan to raise the debt ceiling) is only one step and the US will still have issues to face looking ahead so it's not an end to the gold bull,” Norman said. The dollar enjoyed a relief rally against the yen and Swiss franc also weighed on precious metals.
