Gold futures on the COMEX division of the New York Mercantile Exchange closed below 1,300 US dollars an ounce Friday, as a possible breakthrough in the Washington impasse continued to weigh on safe haven assets.
The most active gold contract for December delivery fell 28.7 dollars, or 2.21 percent, to 1,268.2 dollars per ounce, hitting its lowest level in about three months, according to FactSet statistics. Meanwhile, December gold posted a weekly loss of 3.2 percent.
Market analysts said optimism that U.S. lawmakers are moving toward ending the budget impasse and raising the country's debt limit was the reason behind the recent slump in gold futures prices.
Gold is deeply entrenched in the bear market, and speculation about the political parties reaching an agreement makes it more difficult to make a case for gold, Adam Klopfenstein, senior market strategist at Archer Financial Services Inc., was quoted by Bloomberg as saying.
Though President Barrack Obama and House Republicans have yet reached an agreement on a six-week extension of the debt limit, analysts believed a new debt ceiling would doubtless be reached in the second half of November.
Silver for December delivery fell 63.7 cents, or 2.91 percent, to close at 21.259 dollars per ounce.