Gold edges up as U.S. shutdown drags on, debt limit looms

SINGAPORE Mon Oct 7, 2013 9:15am IST

A pawn shop worker sorts through gold jewellery at Easy Money Pawn shop in Bangkok, August 27, 2013. REUTERS/Athit Perawongmetha/Files

A pawn shop worker sorts through gold jewellery at Easy Money Pawn shop in Bangkok, August 27, 2013.

Credit: Reuters/Athit Perawongmetha/Files

Related Topics

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)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Economic Pulse

REUTERS SHOWCASE

Apple Result

Apple Result

Apple's iPhone sales beat Street but iPad volumes slide.  Full Article 

Nadella's Paycheck

Nadella's Paycheck

New Microsoft CEO Nadella's pay tops $80 mln with big stock awards.  Full Article 

Deregulation Impact

Deregulation Impact

Private fuel retailers to dip toe, not dive back, into India  Full Article 

Airport Accident

Airport Accident

Total CEO de Margerie killed in Moscow plane accident - airport spokeswoman.  Full Article 

Gold Import

Gold Import

RBI will not change gold import rules - sources  Full Article 

Idea Results

Idea Results

Idea Cellular Q2 profit up 69 percent  Full Article 

An RBI First

An RBI First

RBI releases minutes of financial stability council's Aug meet  Full Article 

IBM Earnings

IBM Earnings

IBM ditches 2015 operating EPS target, shares slump 7 pct  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage