Gold Prices Sink on Fiscal Cliff Fears (Update 2)

Reports emerged just before 12 p.m. EST on Thursday that witnesses could hear air raid sirens and explosions in Tel Aviv, Israel. But the country's chief military spokesman said two rockets launched toward Tel Aviv had missed.

Gold prices also took a hit after the World Gold Council announced that demand for the yellow metal was down in the third quarter of 2012 to 1,084.6 tonnes, from a year-ago 1,223.5 tonnes.

Demand in China fell 8%, but central bank buying is up 9% against the same time a year ago, the World Gold Council said.

"Gold is beginning to re-establish itself as part of the fabric of the financial system," Marcus Grubb, managing director of investment at the World Gold Council, said in a statement. "In the medium term, the quantitative easing initiatives in the West and the continuing growth story in the East, particularly in India and China, coupled with the seasonally strong quarter coming up in Asia, are excellent indicators for further growth in the gold market."

Gold mining stocks closed mostly lower on Thursday. Shares of Royal Gold (RGLD) fell 5.9%, and shares of Agnico-Eagle Mines (AEM) dropped 5%

Among volume leaders, Yamana Gold (AUY) lost 3%, while Barrick Gold (ABX) dipped 2%.

Gold ETF SPDR Gold Trust (GLD) was off 0.63% on light volume, and iShares Gold Trust (IAU) sank 0.71%.

-- Written by Joe Deaux in New York.

>Contact by Email.

Follow @JoeDeaux

« First ‹ Previous 1 2