Gold Suffers From Shutdown, Debt Ceiling Optimism

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Oct. 15 (Bloomberg) -- Bloomberg's Scarlet Fu and Bloomberg Industries’ Kenneth Hoffman put futures in focus with a look at the dip in gold prices to a 3-month low in "On The Markets." They speak on Bloomberg Television's "In The Loop."

End of this government shut down before the u.s. hits debt ceiling deadline tomorrow.

With more, let me bring in ken hoffman.

You have been traveling all over the place and just returned from asia and europe.

How does the rest of the world see gold?

Is it a safe haven?

They do, when you are in china and mongolia or korea, the first question at every meeting is -- what is going on with the u.s. government, how will they handle this?

They have are different reason for asking.

They are interested not only in the treasury but they are also interested in the currency.

At the end of the day, the chinese and mongolian zen careers are looking for whether they need to exit the u.s. dollar and diversify into gold.

This is especially the case for china which is made noise to de-americanize the global economy.

China is not allowed to export its gold production so china has a large amount of gold and reserves.

When i was in mongolia, the central bank their said that all of the gold produced in the country will go into the central bank.

They said china deems gold important and its arab a guest trading art or so we have to be in gold important.

And those comments, you have to see how the world is shifting away from the u.s. and toward asia and china.

Especially the currency reserve strategy.

In london, tight range for gold prices was discussed.

Can you explain the range?

Many people are looking for the $1200 -- $1400 range for gold saying when it gets down toward $1200, you see a lot of mine closures which we saw at the beginning of this year so that gives you downside protection.

On the upside, worrying about the taper and people saying if the u.s. starts to ease monetary policy, then there will be a cap to gold and nobody wants bet against the fed on the upside.

Ken hoffman, thank you so much.


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