US President Barack Obama met with Congressional leaders on Friday, asking them to prepare an interim plan to avert the looming USD 607 billion automatic spending cuts and tax hikes that threaten to drag the US economy into another recession in 2013. A US recession may spell bad news for the bullion given that a recession may ease worries over inflation, dimming the appeal of the precious metal, which is considered as a hedge against inflation.
Gold futures were supported by a pickup in physical demand for the bullion in the domestic spot market ahead of a key festival. While retail demand remained sluggish,Jewellers in India are restocking ahead of the Pongal festival, a key harvesting festival to be celebrated in the state of Tamil Nadu in mid-January.
At the MCX, the price of the February 2013 contract was trading at Rs 30,716 per 10 grams, up by 0.06 per cent, after opening at Rs 30,707, against a previous close of Rs 30,697. It touched an intra-day high of Rs 30,723 till trading (At 10:32 AM IST).