Gold prices continue to dive on market expectations that the US Congress would reach an agreement to avoid the "fiscal cliff".
Sanya Harnpatanakitpanich, a strategist at Globlex Securities, said gold prices had declined even as the US dollar strengthened.
US economic data have improved, with housing starts rising to a better than expected 900,000 units.
But Fitch Ratings, a global credit agency, warns that the US would be downgraded if it fails to prevent the fiscal cliff, a scenario where spending is drastically cut and taxes are raised sharply.
"So, investors should watch out for any factor that could affect sentiment, which will in turn cause asset prices to be volatile," said Mr Sanya.
MayBank Kim Eng Securities said the US success in avoiding the fiscal cliff would be negative to gold price as investors would dare take more risk and shift their investments from secure assets to something else.
"In any case, gold prices will continue to drop to below US$1,660 per ounce to the support level at US$1,650 and then $1,630. If the US fails to avoid the cliff, then gold might bounce to $1,700 an ounce," said MayBank Kim Eng research.
After a long rally, the Thai stock market eased slightly yesterday on US budget talks in line with other markets.
The SET Index yesterday closed at 1,377.40 points, down 0.07% in trade worth 41.93 billion baht.
"The markets are waiting for the results of the US solution and the Bank of Japan's meeting on its quantitative easing," said Apisit Limthamrongkul, assistant research manager at Kiatnakin Securities.
Veerathai Santiprabhob, SET's chief strategy officer, said the SET index last month rose sharply on expectations of a solid recovery of the US economy.
At the end of November, the index closed at 1324.04 points, up by 1.94% from October's levels, and by 29.13% from the end of 2011.
The market capitalisation of the SET expanded by 31.92% to 11.09 trillion baht while the value of the Market for Alternative Investment rose by 60.72% to 124.26 billion baht.
Foreign investors made up 29.52% of total trading volume in November, up 22.77% from October 2012.
He said market liquidity is expected to be high throughout next year on relatively low interest rates and consumption.
Bonds are forecast to benefit from inflows, while the equity market may fluctuate depending on market sentiment and investors' risk aversion.
He said Thai shares were still attractive compared to regional markets due to reasonable price-to-earnings ratio, good operating results of listed companies which have benefited from the corporate income tax cut.
In addition, Asean connectivity will help stimulate domestic consumption and investments by both governments and the private sector.