Gold Prices Turn Negative (Update 1)

"Clearly we know that the PIGS countries are called the pigs for a reason -- that being that there's too much debt on their respective balance sheets and that they've over-levered themselves," said Kevin Mahn, president of Hennion & Walsh Asset Management. "The dark clouds that persist over Europe ... Italy and Spain coming to the forefront again yesterday, and then the looming round two of the fiscal cliff as relates to spending cuts and potential sequestration."

Though sequestration talks haven't heated up in Washington, Republican leaders thump President Barack Obama on Monday for missing a deadline to submit his 2013 budget proposal.

Monday marked the deadline for Obama to submit his budget, but White House Press Secretary Jay Carney told reporters to focus on substance over deadlines.

House Speaker John Boehner used the occasion to take a swipe at the president.

"For the fourth time in five years this White House has proven it does not take trillion-dollar deficits seriously enough to submit a budget on time," Boehner said in a statement.

Carney acknowledged that he saw Boehner had made a comment about the missed deadline.

"The president has put forward consistently budgets that achieve what the American people overwhelmingly support, which is balanced deficit reduction, deficit reduction combined with investments in areas of our economy that would help the economy grow and create jobs," Carney told reporters on Monday aboard Air Force One.

Gold prices haven't reacted to the uncertainty surround the budget and possible cuts, but investors may begin to pay more attention if continued quarrels between the president and the GOP-controlled House push into March when deadlines approach on sequestration and a new budget.

Gold mining stocks were mostly lower Tuesday. Shares of Gold Fields (GFI) were losing 1.3%, and shares of Randgold Resources (GOLD) were dipping 1.9%.

Among mining ETFs, Market Vectors Gold Miners ETF (GDX) was effectively unchanged, while Market Vectors Junior Gold Minders ETF (GDXJ) was off 0.80%.

Gold ETF SPDR Gold Trust (GLD) was slumping 0.05%, while iShares Gold Trust (IAU) was shedding 0.04%.

-- Written by Joe Deaux in New York.

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