Gold Falls on Bets U.S. Deadlock Will Be Settled SoonDebarati Roy
Gold fell for the fourth time this week on speculation that that the effect of the partial U.S. government shutdown will be short-lived, crimping demand for the metal as a store of value.
The shutdown entered the fourth day amid wrangling by lawmakers over the budget and debt limit. Bill Gross of Pacific Investment Management Co. and BlackRock Inc.’s Laurence D. Fink said the deadlock will be resolved soon, limiting damage to the economy. The Standard & Poor’s 500 Index of equities climbed as much as 0.8 percent.
“Money seems to be chasing equities,” Phil Streible, a senior commodity broker at R.J. O’Brien & Associates in Chicago, said in a telephone interview. “Gold does not seem to be attracting the safe-haven premium.”
Gold futures for December delivery fell 0.6 percent to settle at $1,309.90 an ounce at 1:41 p.m. on the Comex in New York. Earlier, the price swung between gains and losses, climbing as much 0.6 percent.
“The raw emotion of this market creates snap trades, which do not define anything,” Peter Hug, the global trading director of Kitco Metals Inc. in Montreal, said in a report.
As many as 800,000 U.S. federal employees are temporarily out of work. Congress also faces a dispute over raising the $16.7 trillion debt ceiling this month.
Gold, down 2.2 percent this week, has slumped 22 percent in 2013 as equities rallied to a record and inflation remained low.
Silver futures for December delivery declined 0.2 percent to $21.752 an ounce. The price has dropped 28 percent this year.
On the New York Mercantile Exchange, platinum futures for January delivery advanced 1.1 percent to $1,388 an ounce. The metal has declined 10 percent this year.
Palladium futures for December delivery rose 0.2 percent to $701.95 an ounce. This week, the price dropped 4.1 percent, the most since late June.