Gold Swings as U.S. Lawmakers Seen Nearing Deal on Debt Ceiling Gold swung between gains and losses amid speculation that U.S. lawmakers will forge a deal to avoid breaching the nation’s debt ceiling and end a two-week partial government shutdown. Silver dropped for a sixth day. Bullion for immediate delivery lost as much as 0.5 percent to $1,266.40 an ounce and gained 0.3 percent, before trading at $1,272.65 at 12:20 p.m. in Singapore. Prices fell to $1,260.61 on Oct. 11, the lowest since July 11, on expectations that a deal would be reached. Gold for December delivery dropped 0.3 percent to $1,272.30 on the Comex in New York. Senate Majority Leader Harry Reid said yesterday that he’s very optimistic an agreement can be reached this week. Leaders are working to suspend the debt ceiling through Feb. 7 and fund the government through Jan. 15, according to a person familiar with talks, who spoke on condition of anonymity. Gold slumped 24 percent this year as U.S. economic growth quickened and stocks rallied, curbing demand for a haven. “The market’s expecting that there will be a resolution, and that it will come at the last minute,” said David Lennox, a resource analyst at Fat Prophets in Sydney. “If it doesn’t, we may see some safe haven” demand, he said. If Congress fails to reach an accord, the federal government will run out of borrowing authority on Oct. 17 and start missing payments sometime between Oct. 22 and Oct. 31, according to the Congressional Budget Office. SPDR Holdings Holdings in the SPDR Gold Trust, the biggest bullion-backed exchange-traded product, fell to 889.13 metric tons yesterday, the lowest since February 2009, according to data compiled by Bloomberg. Outflows since the shutdown began reached 16.9 tons, topping the 15 ton contraction in September, the data show. Gold is heading for the first annual loss since 2000 on expectations that the Federal Reserve will slow the pace of its $85 billion monthly bond purchases as the economy recovers. While the Fed unexpectedly refrained from tapering stimulus at its Sept. 17-18 meeting, minutes of the gathering released on Oct. 9 showed that most policy makers said the central bank would probably reduce the pace of bond purchases this year. The Fed will begin tapering in December, according to 24 of 41 economists surveyed Sept. 18-19. Gold rose 70 percent from December 2008 to June 2011 as the Fed pumped more than $2 trillion into the financial system. Silver for immediate delivery dropped as much as 0.8 percent to $21.1045 an ounce, and was at $21.175. A sixth day of declines would be the worst streak since April. Platinum was little changed at $1,376.30 an ounce, while palladium also traded little changed at $714.15 an ounce. bloomberg
Posted on: Tue, 15 Oct 2013 05:26:05 +0000
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