US:Gold drops as shutdown continues MARKETS PRECIOUS
NEW YORK, Oct 4 Dow Jones - Gold prices have declined as investors remained upbeat about an eventual resolution to the US budget impasse that has kept the federal government shut down for four days.
The most actively traded contract, for December delivery, fell $US7.70, or 0.6 per cent, to settle at $US1,309.90 a troy ounce on the Comex division of the New York Mercantile Exchange.
Gold prices fell 2.2 per cent this week as investors remained optimistic that the federal government closure, which began on October 1, soon will be resolved.
Traders at TD Securities said a protracted budget impasse was likely to drive more investors away from equities, which are sensitive to an economic slowdown, and toward gold, which is seen as a haven.
So far, an accord has eluded lawmakers amid wrangling over a short-term measure to fund the government.
Democrats have refused to negotiate with Republicans on any bill that ties funding the government to altering parts of the Patient Protection and Affordable Care Act, known as Obamacare.
Some investors saw glimmers of hope amid reports that senior House Republicans were moving away from this tactic and shifting toward a broader accord that would include an increase to the debt ceiling.
Lawmakers must raise the national borrowing limit by October 17 or run the risk of a US sovereign debt default.
"The temporary US government shutdown has not been a positive driver for prices, (but) the risk of a debt ceiling breach holds scope to reignite interest," said Suki Cooper, a gold analyst with Barclays, in a note to clients.
Gold's losses were kept in check amid hopes that the Federal Reserve will continue to pump money into the economy for longer than expected in order to offset the impact of the government shutdown.
Gold, widely viewed as a store of value, had rocketed to a series of record highs on the back of the central bank's easy-money measures.
Settlements (ranges include open-outcry and electronic trading): London PM Gold Fix: $1,309.75; previous PM $1,316.00 Dec gold $1,309.90, down $7.70; Range $1,305.10-$1,326.00 Dec silver $21.752, down 3.4 cents; Range $21.500-$21.930 Jan platinum $1,388.00, up $14.70; Range $1,373.70-$1,391.00 Dec palladium $701.95, up $17.50; Range $692.50-$709.50 Dow Jones cdh