* Gold hits lowest since Nov. 6, breaking below 100 DMA * Options-related selling, fund liquidation weigh * Markets eye U.S. nonfarm payrolls Friday * Coming up: U.S. private-sector ADP Nat'l employment Wed. (Adds market details, updates prices) By Frank Tang NEW YORK, Dec 4 Gold fell more than 1 percent on Tuesday, underperforming equities and other commodities, as heavy fund liquidation and options-related selling sent bullion prices below a key technical support. The metal hit its lowest price in nearly a month after breaking below its 100-day moving average around $1,700 an ounce, a level the metal had held since mid-August. Economic uncertainty related to U.S. budget talks and waves of heavy selling after last week's option expirations also pressured bullion, traders said. "You cannot attribute this kind of volatility to any sudden, new fundamentals. There are obviously some large fund-, algorithmic-type players moving the market around," said Bill O'Neill, partner of commodities investment firm LOGIC Advisors. Open interest, a gauge of market activity, has fallen 10 percent since hitting a 14-month high of nearly 500,000 lots on Nov. 23. The market has now fallen in five of the last seven sessions. Spot gold fell as low as $1,690.64 an ounce and was down 1.2 percent at $1,694.44 by 2:22 p.m. EST (1922 GMT). Most-active U.S. COMEX futures contract for February delivery settled down $25.30 at $1,695.80, with trading volume in line with its 30-day average, preliminary Reuters data showed. Dealers say confidence in gold has also been eroded by memories of last December's 10 percent price slide and disappointment over a failure to break $1,800 an ounce on the heels of the Fed's assets buyback in September. Republicans in the U.S. Congress on Tuesday attacked each other over their leadership's "fiscal cliff" offer to Democratic President Barack Obama. Jeffrey Sherman, commodities portfolio manager at the $50-billion DoubleLine Capital, said gold was weighed down by the bickering between Republicans and Democrats over tax hikes and spending cuts due to take effect at year-end unless a budget agreement is reached. Economists said such drastic fiscal measures could push the U.S. economy into recession, dragging equities and other assets lower and undermining gold's inflation-hedge appeal. Spot silver dropped 2.1 percent to $32.90. NONFARM PAYROLLS EYED Gold investors are now focusing on the outlook for U.S. non-farm payrolls data on Friday, due to the link between job creation and monetary policy. Continued weak job creation numbers could mean the Fed's monthly buyback of $40 billion in mortgage-backed securities would likely continue in the near term. Another round of aggressive Fed asset buyback and possible economic stimulus from the Bank of Japan could lift gold prices, said Mark Luschini, chief investment strategist of broker-dealer Janney Montgomery Scott, which manages $54 billion in assets. Platinum group metals retreated after Monday's gain on news U.S. auto sales in November raced to a five-year high for that month on a rebound from storm-ravaged October and the need to replace aging vehicles. Encouraging auto sales data left industry executives optimistic about 2013. Platinum was down 1 percent at $1,584.24 an ounce, while palladium, which has risen for the past five weeks, fell 0.9 percent to $679.50. 2:22 PM EST LAST/ NET PCT LOW HIGH CURRENT SETTLE CHNG CHNG VOL US Gold FEB 1695.80 -25.30 -1.5 1692.60 1719.20 171,480 US Silver MAR 32.808 -0.951 -2.8 32.745 33.750 45,223 US Plat JAN 1582.90 -30.90 -1.9 1581.00 1609.90 7,970 US Pall MAR 682.70 -8.55 -1.2 678.80 691.80 3,426 Gold 1694.44 -20.41 -1.2 1690.64 1717.06 Silver 32.900 -0.710 -2.1 32.700 33.660 Platinum 1584.24 -16.51 -1.0 1584.00 1605.50 Palladium 679.50 -6.30 -0.9 680.27 689.00 TOTAL MARKET VOLUME 30-D ATM VOLATILITY CURRENT 30D AVG 250D AVG CURRENT CHG US Gold 184,953 184,922 174,492 13.09 0.10 US Silver 47,973 58,689 52,693 22.67 0.47 US Platinum 8,874 8,851 8,877 16.64 -1.22 US Palladium 3,528 6,073 4,747 (Additional reporting by Jan Harvey and David Brough in London; Editing by Bob Burgdorfer)
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