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TheStreet Open House

Gold Prices Slip as Debt Ceiling Extended (Update 1)

Stocks in this article: KGC GFI ABX NEM IAU GLD

Dash said technicals showed a return to a negative correlation in 2012 between gold and the U.S. dollar, and said that gold could sink fast if it dips below $1,645 an ounce anytime soon.

The Bank of Canada announced Wednesday that it would make no changes to key interest rates, and reported that it didn't believe the country's economy would reach full capacity until the second half of 2014. Gold investors may have been watching for any signs of inflation in the Canadian economy. The central bank said it expected inflation to trough at 0.9% in the first quarter of 2013, but move up to 2% by the third quarter of 2014.

The Bank of England's Monetary Policy Committee printed minutes of its January meeting, which showed consensus to keep rates low, but disagreement about the effectiveness of continued asset purchases.

The Federal Reserve expressed similar disagreement as to the effectiveness of its quantitative easing programs on the economy, but central bankers generally still believe the near-term benefits of monetary stimulus are necessary.

Gold mining stocks were mostly lower on Wednesday. Shares of Kinross Gold (KGC - Get Report) were losing 2.4%, and shares of NovaGold Resources (GFI - Get Report) were off 2.5%

Among volume leaders, Barrick Gold (ABX - Get Report) and Newmont Mining (NEM) were slipping 1.2%

Gold ETFs were trading at high volumes as SPDR Gold Trust (GLD) was decreasing 0.31%, and iShares Gold Trust (IAU) was sliding 0.33%.

-- Written by Joe Deaux in New York.

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