Gold continues lower, remains below USD1,300

NEW YORK (Oct 11)  Gold futures continued to trade lower during Friday’s Asian session after bullion lost ground Thursday amid a risk-on rally in the U.S.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery fell 0.65% to USD1,288.50 per troy ounce in Asian trading Friday. The December contract settled lower by 0.79% at USD1,296.90 per ounce Thursday.

Gold futures were likely to find support at USD1,278.20 a troy ounce, the low from Oct. 2, and resistance at USD1,330.10, Tuesday's high.

Traders departed gold and other perceived safe-havens to embrace riskier assets on news the two U.S. political parties may be close to reaching a deal to reopen the government. The U.S. government shutdown, the first in 17 years, is now into an eleventh day.

U.S. Treasury Secretary Jack Lew reiterated Thursday that the U.S. will reach its debt ceiling on Oct. 17 and warned that the political crisis is starting to hurt the economy. The comments came during testimony to the Senate finance committee.

It is expected leaders from both parties will be meeting with President Obama at the White House tonight to hammer out a deal to reopen the deal before the deadline for extending the debt ceiling arrives on October 17.

In U.S. economic news out Thursday, the Labor Department said U.S. initial jobless claims rose to 374,000 last week, an increase of 66,000 from the previous week's unrevised figure of 308,000.

Elsewhere, Comex silver for December delivery fell 0.30% to USD21.830 per ounce while copper for December delivery jumped 0.43% to USD3.257 an ounce.