* Fund liquidation, technical selling weigh on gold * Goldman Sachs predicts turn in gold's bull cycle * South Korea bought 14 T gold in November * Coming up: U.S. weekly jobless claims Thursday (Adds market details, updates prices) By Frank Tang NEW YORK, Dec 5 Gold slipped to a one-month low below $1,700 an ounce on Wednesday as a weaker price forecast by Goldman Sachs triggered some fund liquidation, offsetting news of fresh central bank buying. Bullion later rebounded off its lows to end down 0.2 percent. Earlier in the session, it was under technical selling below its 100-day moving average and after it broke through support at Tuesday's low at $1,690.64. Gold was pressured after Goldman Sachs cut its 2013 gold outlook and said the metal's current bull cycle will likely turn next year as rising real interest rates and better growth offset monetary stimulus from the U.S. Federal Reserve. "There is some heavy selling by fund investors and leveraged money, but physical gold demand should benefit in the long run from the fiscal cliff after these short-term fluctuations," said Miguel Perez-Santalla, vice president of physical gold dealer BullionVault. Spot gold was down 0.2 percent at $1,693.65 an ounce by 3:37 p.m. EST (2037 GMT), having earlier hit a low of $1,684.40, the weakest since Nov. 6. U.S. COMEX gold futures for December delivery settled down $2 an ounce at $1,693.80, with trading volume more than 20 percent below its 30-day average, preliminary Reuters data showed. Republicans and Democrats dug in on U.S. budget talks to avoid the $600 billion in tax hikes and spending cuts due to kick in the New Year on Wednesday, with both sides urging quick action but offering no compromises in a political stare-down that shows no signs of breaking. PHYSICAL BUYING STRONG Despite gold's recent pullback, physical demand should underpin the market at lower prices, traders said. Holdings of the world's largest gold-backed exchange-traded fund, New York's SPDR Gold Trust, hit a record high as the fund reported a 2.4 tonne inflow on Tuesday. Similarly, physical coin and bullion sales also received a boost from uncertainty surrounding the fiscal cliff. U.S. Mint's November gold coin sales had their highest November performance in 14 years, while gold dealer BullionVault also said it notched net buying of nearly 18,000 ounces in November for a second straight monthly rise. The metal rose in early session after South Korea's central bank said it bought 14 tonnes of the metal in November, its fourth purchase in about 1-1/2 years. Central banks have switched to being net buyers of gold from net sellers in the last two years, with most acquisitions made by banks in Asia and the developing world. Central banks buying accounted for 455 tonnes of demand last year. Among other precious metals, silver was down 0.2 percent at $32.86 an ounce, platinum inched up 40 cents to $1,579.50, and palladium edged up 0.5 percent at $681. 3:37 PM EST LAST/ NET PCT LOW HIGH CURRENT SETTLE CHNG CHNG VOL US Gold FEB 1693.80 -2.00 -0.1 1686.00 1708.30 141,053 US Silver MAR 32.957 0.149 0.5 32.585 33.300 38,087 US Plat JAN 1584.20 1.30 0.1 1571.00 1597.50 8,288 US Pall MAR 687.45 4.75 0.7 673.25 689.80 3,488 Gold 1693.65 -3.09 -0.2 1684.40 1706.60 Silver 32.860 -0.050 -0.2 32.550 33.230 Platinum 1579.50 0.40 0.0 1574.50 1594.00 Palladium 681.00 3.30 0.5 675.02 686.00 TOTAL MARKET VOLUME 30-D ATM VOLATILITY CURRENT 30D AVG 250D AVG CURRENT CHG US Gold 151,412 186,372 174,754 12.98 -0.12 US Silver 40,111 59,041 52,743 22.81 0.14 US Platinum 9,293 8,678 8,818 17.86 -0.55 US Palladium 3,498 6,070 4,748 (Additional reporting by Jan Harvey and David Brough in London; Editing by Bob Burgdorfer and Marguerita Choy)
Our top photos from the last 24 hours.