Gold Advances With Silver as Start of U.S. Shutdown Spurs DemandGlenys Sim
Gold climbed as the first U.S. government shutdown in 17 years began, increasing demand for a protection of wealth on concern that the impasse may endanger the recovery in the largest economy. Silver increased.
U.S. lawmakers failed to forge an agreement in budget talks for the new fiscal year that started at midnight, triggering the shutdown that risks curbing growth. Parts of the economy that depend on the government “would be hamstrung,” President Barack Obama said before the deadline. No further negotiations between the two main parties are scheduled.
“We’ve never seen such a breakdown like we’re seeing at the moment and it’s happening during the middle of a very slow recovery from a fairly deep recession,” Justin Smirk, senior economist at Westpac Banking Corp., said from Sydney. “You’ve got people going for gold as a hedge.”
Bullion for immediate delivery rose as much as 0.6 percent to $1,337.49 an ounce, and was at $1,331.91 at 10:27 a.m. in London. Silver advanced as much as 1.2 percent to $21.9515 an ounce, before trading at $21.769.
Gold futures for December delivery rose 0.3 percent to $1,331.10 an ounce on the Comex in New York in trading that was 42 percent below the average for the past 100 days for this time of day, data compiled by Bloomberg show.
The U.S. Congress, which has stumbled to fiscal deadlines in the past three years, failed to break the deadlock, putting as many as 800,000 federal employees off work from today. The Bloomberg U.S. Dollar Index, which tracks the greenback against 10 major currencies, fell 0.2 percent.
Bullion dropped 4.7 percent in September even as U.S. Federal Reserve policy makers decided not to slow their $85 billion-a-month of bond buying, preferring to wait for further signs of improvement in the economy.
Platinum rose 0.1 percent to $1,405.24 an ounce, after earlier falling as much as 0.6 percent to $1,395.13, the lowest level since July 11. Palladium advanced 0.3 percent to $725.58 an ounce.