Gold futures weakened Friday, with investors preparing for the possibility of higher taxes next year as U.S. lawmakers continue work on a budget deal as the year-end deadline approaches. Gold for February delivery fell $7.80, or 0.4%, to settle at $1,656.30 an ounce on the Comex division of the New York Mercantile Exchange. Gold prices fell 0.3% for the holiday-shortened week. Investors weighed prospects for what would be a last-minute budget deal ahead of an afternoon meeting called by President Barack Obama at the White House. As 2012 wraps up, “what we're seeing is lot of profit-taking by people who've made pretty good money on gold over the last couple of years," according to Edmund Moy, chief strategist at Morgan Gold and a former director of the United States Mint. Also, “investors are really concerned about what their tax situation is going to look like for 2013," he said, pointing to uncertainty about whether lawmakers will reach a deal to avert tax increases and spending cuts set for Jan. 1. “Just knowing all the talk about raising capital-gains and personal-income taxes — people are profit-taking." A final deal from Washington may include a 5% increase on long-term rates on capital gains. Gold's on track for an annual gain of about 6%, which would be the smallest such gain since 2008. February gold on Thursday settled up $3, or 0.2%. The metal pared gains from earlier in that session after the Labor Department said first-time applications for unemployment benefits fell last week to one of the lowest levels of the year. Helping color Friday's trading, congressional leaders are due at the White House for a meeting at 3 p.m. Eastern, as part of a last-ditch effort to avert the looming fiscal cliff. Obama will make a scaled-back offer to avoid the fiscal cliff, a term coined for the event that will take place if the president and Congress can't agree on terms. Senate Democratic leader Harry Reid, House Speaker John Boehner, Senate Republican leader Mitch McConnell and House Democratic leader Nancy Pelosi were expected to attend the meeting. Among other metals trading Friday, March silver fell 27 cents, or 0.9%, at $29.98 an ounce, and March palladium shed $8.20, or 1.2%, at $700.30 an ounce. January platinum fell $14.40, or 0.9%, at $1,517.40 an ounce. Copper for March delivery fell 1 cent, or 0.3%, to close at $3.59 a pound. For the week, silver fell 0.7% while palladium climbed 2.6%. Platinum lost 1.3% but copper picked up 0.6%. Marketwatch
