Gold edged lower on Monday, extending losses to a third straight session, as trade slowed ahead of the year-end holidays and investors showed little response to the latest progress in US budget talks. US House of Representatives Speaker John Boehner's offer to accept a tax rate increase for the wealthiest Americans removes a key Republican road block to a deal resolving the year-end "fiscal cliff".

But there is no imminent sight of an agreement, as President Barack Obama will face stiff Democratic opposition to cuts in entitlement spending. Gold barely responded to the news, and moved in a narrow range below $1,700 an ounce, after falling for the third straight week, despite a fresh bond buying scheme announced by the Federal Reserve last week.

Spot gold had inched down 0.3 percent to $1,689.50 an ounce by 0720 GMT, after falling nearly half a percent in the previous week. US gold lost 0.4 percent to $1,690.90. Spot silver was little changed at $32.17, after earlier falling to a one-month low of $32.13, just below its 100-day moving average at $32.14. Spot palladium lost 0.6 percent to $696, after rising for seven weeks straight, its longest winning streak in more than two years.

Copyright Reuters, 2012