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Gold Holds Above $1300 As Shutdown Enters 4th Day

ByICN.com
Published 10/04/2013, 06:01 AM
Updated 07/09/2023, 06:31 AM

Gold heads for the biggest weekly decline in three weeks but losses were limited as investors consider the threat of the partial U.S. government shutdown on economic growth, which could increase bullion’s safe-haven appeal.

Spot gold rebounded from an eight-week low of $1277.15 on October 2, and held above $1300 an ounce after, as investors assess the government closure and its impact on the outlook for monetary stimulus from the U.S. Federal Reserve.

The shutdown of the US government appeared likely to drag on for another week and possibly longer as lawmakers consumed day three of the shutdown with a stalling game, raising fear that the impasse could hurt a more significant mid-October deadline to raise the US debt ceiling.

President Barack Obama canceled plans to attend two summits in Asia as lawmakers sought a deal to end the shutdown.

Spot gold traded at $1318.76 per ounce at 07:09 GMT, up 0.15% from late Thursday at $1316.55.

Gold’s 1.6 % loss for the week so far was largely due to a single massive sell order on Tuesday that sent prices below $1,300 an ounce, but it quickly recovered as the budget impasse in Washington dragged on.

Gold traders have been closely monitoring US data on the labour and housing markets to judge the strength of the economy, which in turn could decide when the Federal Reserve would begin cutting back its bullion-friendly stimulus measures.

Fed officials have said this week that the lack of data was making it difficult to read the economy and the Fed might have to keep monetary policy for longer to help offset the harm caused by political fighting in Washington.

The shutdown caused a delay in a number of economic reports that are released by federal agencies, including the jobs figures for September.

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