The price of gold fell Tuesday on expectations that lawmakers are closer to a budget agreement.

Gold for February delivery fell $27.50 to finish at $1,670.70 an ounce.

With two weeks left to resolve their differences, President Barack Obama and House Speaker John Boehner made some concessions but held their ground on other issues. That created expectations that the two were making progress toward a compromise.

If the two sides fail to reach an agreement before Jan. 1, tax increases and government spending cuts will take go into effect, an outcome that has been dubbed the "fiscal cliff." Some economists believe that could push the country into a recession.

A new budget will make it less likely that the Federal Reserve will have to take additional steps to promote the economy. Such Fed measures typically benefit gold, said Dave Meger, a vice president of metals trading at Vision Financial Markets.

"The closer we get to some type of resolution takes away a bit of that possibility and hence is ... less supportive of gold," he said.

Industrial metals also fell in part because of the drop in gold prices. It also is the time of year when trading is light in metals, Meger said.

In March contracts, silver fell 61.1 cents to end at $31.669 an ounce, copper fell 1.25 cents to $3.6535 a pound and palladium dropped $7.35 to $690.95 an ounce. January platinum ended down $14.80 at $1,593.70 an ounce.

Energy contracts ended higher. Benchmark oil rose 73 cents to finish at $87.93 a barrel, heating oil gained 4.02 cents to $2.9965 per gallon, wholesale gasoline rose 3.63 cents to $2.6909 per gallon and natural gas increased 6 cents at $3.418 per 1,000 cubic feet.

In other trading, soybean prices fell 2 percent after China and another unspecified country canceled purchases of more than 300,000 metric tons of U.S. beans, analysts said.

Mike Zuzolo, president of Global Commodity Analytics & Consulting LLC, speculated that China placed an order for the beans when they were at a higher price. It canceled that order and likely will buy soybeans at a lower price, he said.

Soybeans for January delivery fell 30.25 cents to end at $14.66 a bushel, March wheat rose 3.25 cents to $8.1125 a bushel and March corn fell 4 cents to $7.20 a bushel.

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