Gold Swings in London as Investors Weigh U.S. Shutdown, Debt
LONDON (Oct 4) Gold swung between gains and losses in London as investors weighed the outlook for reducing stimulus amid a partial shutdown of the U.S. government and wrangling over the debt limit.
The first partial government shutdown in 17 years delayed economic releases this week, including the monthly payrolls report and the official jobless rate, which was scheduled for release today. Atlanta Fed President Dennis Lockhart said the shortage of data “would tend to make me somewhat more cautious” about reducing the pace of bond purchases.
Gold is set for the first annual drop in 13 years as some investors lost faith in the metal as a store of value. Holdings in gold-backed exchange-traded products slid 27 percent this year on speculation the Federal Reserve will slow debt purchases. Economists surveyed by Bloomberg Sept. 18-19 expect the first step in cutting bond buying in December.
“There is a complete lack of interest as of late in the precious metals market,” David Govett, head of precious metals at Marex Spectron Group in London, wrote today in a report. “If there is no resolution over the weekend then the market should remain supported and find some buying next week. If there is a resolution, then look for a drop.”
Gold Price
Gold for immediate delivery added 0.1 percent to $1,318.41 an ounce by 9:29 a.m. in London. Prices lost as much as 0.1 percent after gaining 0.5 percent. Bullion for December delivery was little changed at $1,318 an ounce on the Comex in New York. Futures trading volume was 57 percent below the average for the past 100 days for this time of day, data compiled by Bloomberg showed.
As many as 800,000 federal employees are temporarily out of work as lawmakers wrangle over the budget for the new financial year, which started Oct. 1. Congress also faces a dispute over raising the $16.7 trillion debt ceiling this month.
Gold ETP holdings fell 2.7 metric tons to 1,923.6 tons yesterday, the lowest since May 2010, data compiled by Bloomberg show.
Silver for immediate delivery was little changed at $21.668 an ounce in London. Palladium added 0.1 percent to $702.60 an ounce. Platinum rose 0.4 percent to $1,377.27 an ounce. It’s still set for a sixth straight weekly loss, the worst run since April.
