SINGAPORE: Gold prices edged lower in Asian trade on Thursday, following a steep sell-off in the previous session, as a breakthrough in long-running US fiscal stimulus negotiations remained elusive. Spot gold slipped 0.2% to $1,835.40 per ounce by 0707 GMT, after falling as much as 2.5% on Wednesday. US gold futures were steady at $1,839.20.

"Gold has struggled as markets are disappointed with the inability of US lawmakers to agree on a fiscal deal they were anticipating," said Lachlan Shaw, National Australia Bank's head of commodity research.

Lawmakers in the United States extended federal government funding by a week to give them more time to agree on a coronavirus relief package. But US Senate Majority Leader Mitch McConnell said they were still looking for a way forward.

"We could be seeing a regime change in gold markets as its correlation to real yields has weakened, due to investors continuing to move into riskier assets, creating a challenging outlook for safe-havens like gold," Shaw said.