Gold traded near the highest price in almost a week in London as investors weighed a U.S. political stalemate that extended a government shutdown.
Nonessential U.S. government services have been closed for a week as politicians try to pass a budget. U.S. President Barack Obama reiterated he won’t negotiate with Republicans over the borrowing limit, as Treasury Secretary Jacob J. Lew warned the U.S. may be unable to pay its bills after Oct. 17.
Gold is set for the first annual drop in 13 years as some investors lost faith in the metal as a store of value and on speculation the Federal Reserve will slow debt purchases. The central bank unexpectedly refrained from tapering stimulus last month and 24 of 41 economists surveyed Sept. 18-19 said the Fed will start slowing its bond-buying in December.
“We will stay supported as long as the U.S. keeps playing brinkmanship with itself and as the deadline for the debt ceiling approaches,” David Govett, head of precious metals at Marex Spectron Group in London, wrote today in a report. “Interest in the market is pretty low. Once this farce is out of the way, I think we head lower.”
