adminSINGAPORE. — Gold nudged up in Asian trading yesterday as the near-week long US government shutdown raised fear that Congress may struggle to raise the debt ceiling in time, burnishing bullion’s safe-haven appeal. Failure to raise the US 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 US debt ceiling in 2011, gold hit a record high of US$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, GoldSilver Central managing director in Singapore.
“If we don’t see any progress till the 17th, I think we will see gold spike to US$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,” Mr Lan said.
Spot gold rose 0,2 percent to US$1 312,69 an ounce by 3.33am GMT, also lifting silver and palladium. Platinum added to gains after a 1% 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 give details of positions in US futures and options markets and are a keenly watched measure to judge investor sentiment, was not released on Friday due to the partial government shutdown.
With no key US 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.-Reuters
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