Gold drops to lowest since August

Gold futures on the COMEX division of the New York Mercantile Exchange Tuesday fell to the lowest level since Aug. 30, on hopes of a resolution to the fiscal cliff.

The most active gold contract for February delivery fell 27.5 dollars, or 1.62 percent, to settle at 1,670.7 U.S. dollars per ounce.

Gold lost its safe-haven appeal when both President Barack Obama and House Speaker John Boehner dished out respective new offers and made some progress toward a resolution to the fiscal cliff, driving investors to stocks and bonds that promise better return.

Positive economic data have also exerted pressure on gold prices.

The National Association of Home Builders-Wells Fargo Housing Market Index rose two points to a seasonally adjusted level of 47, up from 45 in November and the highest level since April 2006.

Meanwhile, the U.S. current-account balance fell to 107.5 billion dollars in the third quarter, 9 percent lower than an upwardly revised 118.1 billion dollars in the second quarter, the U.S. Commerce Department said.

News from Europe also depressed gold. Standard & Poor's on Tuesday upgraded Greece's credit rating from selective default to B minus with a stable outlook.

Experts, however, believe that the fundamentals for gold remain strong thanks to the demand in Asia.

Silver for March delivery lost 61.1 cents, or 1.89 percent, to close at 31.669 dollars per ounce. Platinum for January delivery dropped 14.8 dollars, or 0.92 percent, to close at 1,593.7 dollars per ounce.