Gold falls on dollar rise, mixed U.S. economic data

NEW YORK (Sept 26)  Gold fell on Thursday
as a rise in the dollar and mixed U.S. economic indicators
prompted investors to take profits after gains in the previous
session driven by uncertainty over whether the budget impasse in
the U.S. Congress would be resolved.
    In U.S. economic data on Thursday, contracts to buy
previously owned homes fell for a third straight month in
August, but fewer Americans filed new claims for jobless
benefits last week, figures that flashed conflicting signals on
the health of the economy.
    Meanwhile, Republicans in the U.S. House of Representatives
refused to give in to President Barack Obama's demands for
straightforward bills to keep the government running beyond
Sept. 30 and to increase the government's borrowing authority to
avoid an historic default.
    Bullion rose almost 1 percent on Wednesday on continued
safe-haven buying spurred by uncertainty over whether U.S.
lawmakers would be able to agree to a spending bill before next
Tuesday to avert a government shutdown. Analysts said, however,
that gold's gains on U.S. budget talks were likely to be
temporary.
    "Gold could receive a bid over the short term as worries
rise over the debt ceiling talks, but we doubt whether this
variable alone will be enough to keep the complex elevated for
long," said Edward Meir, metals analyst at futures brokerage
INTL FCStone.
    Spot gold was down 0.8 percent at $1,322.18 an ounce
at 12:50 p.m. EDT (1650 GMT).
    U.S. Comex gold futures were down $13.20 an ounce
at$1,323.
    Two years ago, the first U.S. debt ceiling crisis helped
push gold to a record $1,920 an ounce in September 2011. The
crisis was resolved at the last minute.
    Investors continued to watch U.S. economic numbers to
determine whether the U.S. Federal Reserve could begin reducing
bond purchases this year.
    Bullion gained more than 4 percent last week after Fed chief
Ben Bernanke refused to commit to starting a reduction in
quantitative easing this year, defying expectations for a $10
billion cut to the Fed's $85 billion monthly bond-buying
stimulus.
    Uncertainty over the timing of the Fed's next move, however,
has led to choppy trading over the past few sessions.
    Among other precious metals, silver fell 0.3 percent
to $21.69 an ounce. Platinum dropped 1.3 percent to
$1,407 an ounce and palladium inched down 25 cents to
$720.25 an ounce.