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Gold futures higher as U.S. debt deadline approaches

Published 10/16/2013, 03:27 AM
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Investing.com - Gold futures were higher on Wednesday, as investors continued to assess the potential for an agreement to raise the U.S. debt ceiling and avert default before Thursday’s deadline.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,285.40 a troy ounce during European morning trade, up 0.95%.

Prices traded in range between USD1,274.00 a troy ounce, the daily low and a session high of USD1,287.10 a troy ounce. The December contract ended 0.27% lower on Tuesday to settle at USD1,273.20 a troy ounce.

Gold futures were likely to find near-term support at USD1,251.10 a troy ounce, Tuesday’s low and resistance at USD1,311.80, the high from October 10.

Investors continued to monitor negotiations over a U.S. budget impasse that has kept the federal government shut down since October 1.

Senate leaders were continuing negotiations aimed at ending the fiscal impasse, after a last minute deal put forward by House Republicans collapsed on Tuesday.

Markets were also growing increasingly concerned over negotiations to raise the U.S. debt ceiling. If an agreement to raise the federal borrowing limit is not struck ahead of Thursday’s deadline, the U.S. will face an unprecedented sovereign debt default.

Ratings agency Fitch placed its AAA-rating on the U.S. on “rating watch negative” on Tuesday and said a downgrade is possible, citing the prolonged political impasse over a deal to reopen the government and raise the debt ceiling.

Elsewhere on the Comex, silver for December delivery rose 0.9% to trade at USD21.38 a troy ounce, while copper for December delivery was little changed to trade at USD3.310 a pound.

Copper traders looked ahead to a raft of Chinese economic data on Friday.

The Asian nation is scheduled to release a government report on third quarter gross domestic product, with economists predicting growth of 7.8%. The country will also release data on industrial production and retail sales figures for September.

The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.

Trade data over the weekend showed that inbound Chinese copper shipments totaled 457,847 metric tons last month, the highest since March 2012. The figure was nearly 18% higher than copper imports in the previous month.

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