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Crude prices fell on Monday as the U.S. appeared headed for a government shutdown at midnight, which could dampen economic growth if it lingers and crimp demand for fuel and energy. The U.S. Congress must approve a spending package by the end of the day to avoid a government shutdown, and waning faith for a last-minute deal steered investors away from oil on fears an ensuing fiscal drag may hamper recovery. Congressional Republicans and Democrats continued to spar over President Barack Obama's healthcare law, a bargaining chip to fund a spending package to keep the government running. Further pressuring oil lower were fears that political grandstanding will return anew later in October when the government hits its debt ceiling. Congress must lift the spending limit or risk throwing the country into default.
GOLD
Gold prices edged lower on Monday as a U.S. government shutdown loomed large in afternoon trading, which repelled investors away from risk-on assets. The dollar, which normally moves inversely with gold, headed lower earlier, though investors continued to steer clear of the yellow metal and favored the dollar somewhat on sentiments that when fiscal woes subside, the Federal Reserve will be closer to dismantling monetary stimulus programs. The U.S. Congress must approve a spending package by the end of the day to avoid a government shutdown, and waning faith for a last-minute deal steered investors away the dollar as well as from gold and into other safe-haven assets such as the yen earlier. Elsewhere, the dollar took back some of its earlier losses on better-than-expected economic indicators, which boosted expectations for the Federal Reserve to begin tapering stimulus programs once fiscal jitters subside.