Gold tumbles further below $1,300 on deal hopes N
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Gold tumbles further below $1,300 on deal hopes
NEW YORK (MarketWatch)—Gold futures slid further below $1,300 an ounce on Friday, as a possible breakthrough in the Washington impasse continued to weigh on assets viewed as safe havens.
Gold for December delivery (CNS:GCZ3) was last off $29, or 2.2%, to $1,267.90 an ounce, while December silver (CNS:SIZ3) was down 61 cents, or 2.8%, to $21.29 an ounce.
There is no agreement yet to re-open the U.S. government or lift the debt ceiling, but investors are heartened that Republicans and Democrats are talking. The GOP has proposed a six-week extension for the debt limit.
Such an approach “does not actually resolve the budget crisis, and the new debt ceiling would doubtless also be reached again in the second half of November,” said Commerzbank analysts in a note on Friday.
The analysts said that means “ongoing uncertainty” and might even result in the Federal Reserve resorting to “further expansionary monetary policy measures.”
“This should lend support to the gold price. In the short term, however, the desire to sell is still clearly
predominant,” the Commerzbank analysts said. They noted the precious metal “continues to trade below the psychologically important threshold of $1,300.”
Kitco Metals analysts said in a note Friday that even a short-term deal in Washington “should still have the effect of further selling, with the $1,257 level possible next week.” On the other hand, any disruptions in the negotiation process on Friday could push up gold prices and see them test the $1,297 level, according to Kitco.
In economic news on Friday, traders will look for a preliminary October reading for a key consumer sentiment index. Other U.S. economic reports likely won’t come out due to the government shutdown.
On Thursday, December gold lost $10.30 and settled below $1,300 an ounce for the first time in more than a week
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