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Gold near 3-month low as U.S. debt deadline looms

Source : REUTERS
Last Updated: Mon, Oct 14, 2013 03:33 hrs
Salesmen at jewellery shop attend to their customers in Hyderabad

Gold was hovering near three-month lows on Monday after large fund trades in the previous session rattled investors, despite the failure of weekend talks in Washington to reach an agreement to avert a U.S. debt default.

FUNDAMENTALS

Spot gold was down 0.07 percent at $1,271.76 an ounce by 0026 GMT.

Gold fell over 1 percent on Friday to its lowest in three months after unusually large sale orders in New York futures prompted a $30-an-ounce drop in prices in about three minutes and a brief trading halt.

Senate negotiations to bring a boiling fiscal crisis to an end showed signs of progress on Sunday, but there were no guarantees that the U.S. federal government shutdown was about to end or that a historic default would be avoided.

U.S. consumer sentiment deteriorated in October to its weakest in nine months as the first federal government shutdown in 17 years undermined Americans' outlook on the economy, a survey released on Friday showed.

Economic hardships brought about by Arab Spring uprisings have taken a toll on jewellery retail trade in Saudi Arabia's Muslim holy city of Mecca, slashing gold sales by more than half compared to the same period last year, retailers said.

SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.6 percent, or 5.40 tonnes, to 890.98 tonnes on Friday.

The biggest bullion-importing bank in India plans to team up with jewellers for the first time to offer a gold deposit scheme, hoping ease of access and attractive interest rates will tempt people to part with their jewellery and relieve tight supplies.

MARKET NEWS

U.S. stock index futures fell on Monday and the safe-haven yen rose broadly, foreshadowing a rocky start for Asian shares after weekend talks in Washington failed to reach an agreement to avert a U.S. debt default.


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