Gold edges up as U.S. shutdown drags on, debt limit looms
SINGAPORE (Reuters) - Gold nudged up in Asian trading on Monday as the near-week long U.S. government shutdown raised fears Congress may struggle to raise the debt ceiling in time, burnishing bullion's safe-haven appeal.
Failure to raise the U.S. borrowing limit by October 17 will push the world's biggest economy into an unprecedented debt default. Congress is already divided on a spending bill, resulting in a partial government shutdown that is hurting the economy and delaying key data releases.
During the last debate over the U.S. debt ceiling in 2011, gold hit an all-time high of $1,920 an ounce. An agreement was reached by Congress only at the last minute.
"These are critical events that can move the markets greatly," said Brian Lan, managing director of GoldSilver Central Pte Ltd in Singapore. "If we don't see any progress till the 17th, I think we will see gold spike to $1,400."
"Economic data or any news on the debt ceiling will determine the direction that gold and silver will take. Until then, it will be range bound," Lan said.
Spot gold rose 0.2 percent to $1,312.69 an ounce by 0333 GMT, also lifting silver and palladium.
Platinum added to gains after a 1 percent increase on Friday, as mine strikes and curbs threatened to hurt supply.
INVESTORS AWAIT PHYSICAL DEMAND
The Commodity Futures Trading Commission's weekly Commitment of Traders data, which details positions in U.S. futures and options markets and is a keenly watched measure to judge investor sentiment, was not released on Friday due to the partial government shutdown.
With no key U.S. data coming in, traders are now eyeing any pick up in physical demand, especially from China which has been closed for a week for the National Day holiday.
Some dealers said they expected Chinese demand to be good at the current price levels, and a lot stronger if prices fell below $1,300.
In top buyer India, importers were ready to process orders from Monday after the customs department cleared more than a tonne of gold stuck at airports.
(Editing by Joseph Radford and Ed Davies)
- Tweet this
- Share this
- Digg this
- Two Ukrainian fighter jets shot down over rebel-held territory
- UPDATE 2-Concordia finally heads for scrapyard after massive salvage operation
- UPDATE 3-SEC's long path to money market fund reform ends in compromise
- UPDATE 3-Tanker charge tarnishes Boeing's 2nd-quarter profit
- UPDATE 5-TransAsia Airways plane crashes in typhoon-hit Taiwan, killing 47
India will not support a trade facilitation protocol ahead of a July 31 deadline unless its concerns about subsidies are met, two senior government officials said on Wednesday, sticking to a hard line critics say could derail a landmark global trade deal. Full Article
Bullish on Indian equities, but gains seen 'less sharp'- Goldman Sachs Full Article
Jet Airways chairman says looking to restructure debts, talking to bankers Full Article
Honda's India unit to account for 25 pct of Asia Pacific sales by March 2017 - exec Full Article