Gold for December delivery at the COMEX division of the New York Mercantile Exchange was falling $18 to $1,306.60. The gold price traded as high as $1,323.30 and as low as $1,302.60 an ounce, while the spot price was losing $14.36.
Jeffrey Currie, head of commodities research at Goldman Sachs, said at the Commodities Week conference in London on Wednesday that gold is a "slam dunk" sell because the U.S. economy should witness a "significant" recovery following U.S. Congress' resolutions on the debt ceiling and government shutdown.
Ric Deverell, head of commodities research at Credit Suisse, called selling gold positions a top priority in 2014.
The negative outlook among analysts outweighed Tuesday night's reports that President Obama is set to nominate Janet Yellen as the next chief of the Federal Reserve. Gold investors view Yellen's central banking approach as similar to Chairman Ben Bernanke's policies.
Since the 2008 financial crisis, the Fed has implemented multiple rounds of unprecedented economic stimulus, which helped trigger gold¿s historic bull market that peaked in September 2011 and continues to provide support to prices, even though gold has entered what economists and financial analysts call a bear market.
Market participants think Yellen will continue with Bernanke¿s loose monetary policy, and that she won¿t scale back the Fed¿s pace of monthly asset purchases at too fast of a pace. Gold traders view this as positive for precious metals as the Fed¿s stimulus is viewed as long-term inflationary. Many investors buy gold as a hedge against currency inflation.
Gold mining stocks were mostly lower, in line with the drop in gold prices.
-- Written by Joe Deaux in New York.
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