Gold drops ahead of 'fiscal cliff' deadline

Gold futures on the COMEX division of the New York Mercantile Exchange dropped further on Friday, as the Jan. 1 deadline for the U.S. "fiscal cliff" draws near and fears of higher taxes weighed on the market. The most active gold contract for February delivery fell 7.8 dollars, or 0.47 percent, to settle at 1,655.9 dollars per ounce. Investors were uncertain whether President Barack Obama's new offer in his last-ditch efforts to avoid the impending tax hikes and spending cuts, which may take hold next January if no fiscal deal can be reached before yearend, would be accepted by Congress Republicans on Friday afternoon. It was reported that the president has offered to extend current tax rates for American households with annual incomes of 400,000 dollars and under, scaling back from his previously- proposed threshold of 250,000 dollars. Meanwhile, as the year of 2012 draws to an end, the mood of profit-taking has prevailed among investors. Gold is on the way for an annual gain of about 6 percent, the smallest since 2008. Silver for March delivery lost 26.5 cents, or 0.88 percent, to close at 29.975 dollars per ounce. Platinum for April delivery dropped 14.4 dollars, or 0.94 percent, to close at 1,521.6 dollars per ounce.