Washington Impasse Hopes Seen Bad For Gold As Uncertainty Rises

Gold fell slightly Wednesday as the partial U.S. government shutdown enters its ninth day. Uncertainty rises, gold doesn’t. How long can gold go?

The precious metals market reversed course apparently on fresh hopes that U.S. politicians will end the federal paralysis hitting the world’s largest economy. Meanwhile, gold is stuck in the low range of $1,300 an ounce this morning, trading below $1,340 an ounce almost for a week now.

- Spot Gold was down 0.33% to $1,319.34 an ounce

- Spot Silver was down 0.38% to $22.31 an ounce

- Spot Platinum was up 0.14% to $1,400.75 an ounce

- Spot Palladium was up 0.52% to $710.50 an ounce

In a new update about the budget deadlock, President Barack Obama opened the door to talks with Republicans if they end the deadlock over the U.S. debt ceiling.

"I will talk about anything,” the president said at the new conference, indicating Republicans could essentially set the agenda for fiscal talks, but only if Congress agrees first to a short-term spending plan to fund the government and to raise the federal borrowing limit to void a possible first-ever default before 17 October deadline.

Mr. Obama will also nominate Janet Yellen as Federal Reserve Chairman today, a decision that will be closely watched as well as today’s minutes by the Federal Open Market Committee will surely offer all the details behind last month’s surprise decision.

The risk of DC standoff was one of the reasons the FOMC decided not to being reducing the size of its unprecedented asset-purchase program.

China, the world's second-largest consumer of gold, came back from a week-long National holiday and the strong appetite for bullions coming from China is quite keeping the precious metals market afloat, although gold has seen historic price declines and volatility this year.

On the other side, the dollar's rebound damped demand for gold, but today's FOMC release will likely the metal's direction as the markets weighs the possibility that the Fed's taping of its quantitative easing begins this year.

The Dollar Index, which tracks the performance of the greenback against a six-currency basket, is trading back in the low range of the pivotal 80-mark, the highest level in five days.