Investing.com – Gold futures declined on Monday, retreating from the previous session’s record high after U.S. Congressional leaders reached an agreement to raise the U.S. debt ceiling, reducing the safe haven appeal of the precious metal.
On the Comex division of the New York Mercantile Exchange, gold futures for October delivery traded at USD1,616.85 a troy ounce during late Asian trade, slumping 0.72%.
It earlier fell as much as 1% to trade at USD1,608.85 a troy ounce, the lowest price since July 28. Gold prices rallied to a record high of USD1,637.50 a troy ounce in the previous session.
Late on Sunday, President Barack Obama announced a deal between Republicans and Democrats to cut spending and raise the USD14.3 trillion debt ceiling, easing worries about a potential sovereign debt default.
Under the framework deal, the debt ceiling will be raised by at least USD2.1 trillion, sufficient to serve the government’s needs into 2013.
Senate Democratic Majority Leader Harry Reid called it a "historic deal", while adding that the agreement would lift the cloud of possible default that has hovered over global financial markets in recent weeks.
Congress will still need to pass the relevant legislation into law by midnight Tuesday.
“There are still some very important votes to be taken by Congress, but I want to announce the leaders of both parties in both chambers have reached an agreement that will reduce the deficit and avoid default,” President Obama said.
Gold prices remained supported amid concerns over sovereign debt contagion in the single currency bloc after ratings agency Moody’s placed Spain’s Aa2 rating on review for possible downgrade on Friday.
Spain’s economy is bigger than the economies of Portugal, Ireland and Greece combined. Those three countries have already asked for bailouts in the face of rising debt imbalances.
Elsewhere on the Comex, silver for September delivery sank 1.05% to trade at USD39.49 a troy ounce, while copper for September delivery rose 0.47% to trade at USD4.507 a pound.
On the Comex division of the New York Mercantile Exchange, gold futures for October delivery traded at USD1,616.85 a troy ounce during late Asian trade, slumping 0.72%.
It earlier fell as much as 1% to trade at USD1,608.85 a troy ounce, the lowest price since July 28. Gold prices rallied to a record high of USD1,637.50 a troy ounce in the previous session.
Late on Sunday, President Barack Obama announced a deal between Republicans and Democrats to cut spending and raise the USD14.3 trillion debt ceiling, easing worries about a potential sovereign debt default.
Under the framework deal, the debt ceiling will be raised by at least USD2.1 trillion, sufficient to serve the government’s needs into 2013.
Senate Democratic Majority Leader Harry Reid called it a "historic deal", while adding that the agreement would lift the cloud of possible default that has hovered over global financial markets in recent weeks.
Congress will still need to pass the relevant legislation into law by midnight Tuesday.
“There are still some very important votes to be taken by Congress, but I want to announce the leaders of both parties in both chambers have reached an agreement that will reduce the deficit and avoid default,” President Obama said.
Gold prices remained supported amid concerns over sovereign debt contagion in the single currency bloc after ratings agency Moody’s placed Spain’s Aa2 rating on review for possible downgrade on Friday.
Spain’s economy is bigger than the economies of Portugal, Ireland and Greece combined. Those three countries have already asked for bailouts in the face of rising debt imbalances.
Elsewhere on the Comex, silver for September delivery sank 1.05% to trade at USD39.49 a troy ounce, while copper for September delivery rose 0.47% to trade at USD4.507 a pound.