The ongoing debt row in the United States resulted in the good gains made from gold worsened the crisis. Spot gold was on the rise in $19 at $1,325 as U.S. politicians persist in their argument with a few signs of a visible compromise with the U.S. debt ceiling must be agreed upon on or before the deadline set in mid October.
Over the course of the weekend, the senior republicans mentioned that this would have not happened without other determining factors in which the U.S. President is indignantly against. Share prices were badly hit by the certain doubts and analysts are speculating the probability of the volatility hitting the critical level as the deadline comes closer which could have a positive effect in bolstering the price of gold.
Earlier this week, Barclays weighs its present debt situation and is highly probable to impact cold against the previous government shutdown and be able to terminate the debt ceiling predicament could be of primary significance.
In looking at the gold’s immediate price comeback after the 17 occasions of government shutdown since the late seventies in which prices have increased 0.3 % modestly on the first day of the shutdown. The next price change fell by 3.1 %, in the week before the shutdown, the average prices have incrementally decreased by 0.4 % and this time the prices have gone further down by 1.4 %.
By comparison, during the previous debt-ceiling debate two years ago, the prices of gold rallied from below $1,500 per ounce at the beginning of July 2011 to almost $1,800 in August as gold’s safe-haven appeal has enticed the interest broad investors.
Hence the temporary US government shutdown has not been an optimistic and positive driver for the prices, the additional risks of a debt ceiling breach are held within its capacity to reignite the active interest of traders.
Analysts were also anticipating a boost from the return of the Chinese consumer following the recently concluded Golden Week Holiday. Moreover, the Chinese consumers have been the avid purchasers of gold this year and the country has overtaken India as the largest market for gold bars, gold coins and jewellery. Distinctly, silver on the other hand was able to add $0.53 to $22.24, while platinum added $2 to its present rate of $1,385.