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Gold Prices Slump as Debt Limit Deal Raises Stability Hopes (Update 1)

Updated from 12:57 p.m. EST with settlement prices

NEW YORK ( TheStreet) -- Gold prices moved lower on Thursday after investors bet that Washington's short-term extension of the debt ceiling would lead to a deal in four months. Gold fell 0.38% on Wednesday.

Gold for February delivery lost $16.80 to settle at $1,669.90 an ounce at the Comex division of the New York Mercantile Exchange. The gold price traded as high as $1,685.80 and as low as $1,664.20 an ounce, while the spot price was sliding $15.50, according to Kitco's gold index.

Congress' decision to temporarily extend the debt limit gave investors a level of hope that legislators would reach an effective deal in the next few months to ensure that the government could continue to pay its bills, said GMG Defensive Beta Fund Co-portfolio Manager Oliver Pursche.

Thursday's move failed to push the yellow metal out of the tight trading range it has held in the past few weeks.

"Gold is in a trading range right now. What that tells me is there's no one rushing to sell, but there's no one rushing to buy either," said Pursche.

Apple's (AAPL - Get Report) fiscal first-quarter earnings report on Wednesday may have also dragged down the yellow metal on Thursday.

"Yea, Apple just kind of took the whole market with it," said Anthem Blanchard, CEO of Blanchard Vault. "I think you're seeing gold surf on the momentum of that, short term."

The iPhone seller announced earnings of $13.81 a share on revenue of $54.5 billion, after analysts polled by Thomson Reuters had expected $54.73 billion in revenue and profit of $13.47 a share. The revenue miss socked the company's share price in after-hours trades on Wednesday, sinking shares at one point by more than 10%.

Silver prices for March delivery were down 72 cents to close at $31.72 an ounce, while the U.S. dollar index was shedding 0.04% to $79.93.

Gold prices rebounded off earlier lows as the euro gained momentum enough to weaken the U.S. dollar's strong session against the Japanese yen. The dollar was gaining to $89.95 against the yen from the prior day's close at $88.62. But the euro was climbing against the dollar to $1.3372 from its previous day's close at $1.3318.
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