NEW YORK--Gold futures extended their earlier losses on Friday, slumping to the lowest price in three months as investors shed the precious metal amid hopes for a debt deal in Washington. 

The most actively traded contract, for December delivery, recently traded down $29.90, or 2.3%, at $1,267 a troy ounce on the Comex division of the New York Mercantile Exchange. Futures fell as low as $1,259.60 a troy ounce, the lowest intraday price since July 10. 

House Republicans met with President Barack Obama on Thursday to offer a six-week extension of the nation's debt ceiling in exchange for budget-cut talks. The meeting ended without a deal, but was widely seen as a political thaw after weeks of stalemate in Washington. Parts of the federal government have been shut down since last week, and the U.S. borrowing limit is expected to arrive next week, risking a default if a deal to raise the limit is not reached. 

Some investors buy gold as a hedge against political or economic turmoil, and relative calm in financial markets even as the U.S. government shut down has gold futures poised for a fourth consecutive loss.