Gold rebounded from a three-month low after negotiations stalled in the Senate on ending a U.S. government shutdown and preventing a default, boosting demand for the metal as a haven.
Senator Dianne Feinstein, a California Democrat, said talks fell apart, and the Senate needs to “vote on what we believed our agreement was.” Without an agreement on the debt ceiling, U.S. borrowing authority lapses on Oct. 17, and the 15-day government shutdown continues. The Standard & Poor’s 500 Index fell as much as 0.8 percent.
“Safe-haven bids are coming in for gold as the debt ceiling worries are gripping everyone,” Phil Streible, a senior commodity broker at R.J. O’Brien & Associates in Chicago, said in a telephone interview. “Investors are very nervous and are in a ‘risk-off’ mode.”
Gold for immediate delivery rose 0.7 percent to $1,281.80 an ounce at 3:30 p.m. New York time. Earlier, the price fell as much as 1.6 percent to $1,251.85, the lowest since July 10.
On the Comex in New York, gold futures for December delivery fell 0.3 percent to close at $1,273.20 at 1:43 p.m. In electronic trading, the price rose as much as 0.9 percent from yesterday’s settlement.