Gold slips on possible US government shutdown

Gold futures on the COMEX division of the New York Mercantile Exchange went down Monday as the U.S. Senate on Monday rejected a measure approved earlier by the Republican-controlled House of Representatives, making a shutdown of government agencies likely. The most active gold contract for December delivery dropped 12. 2 dollars, or 0.91 percent, to settle at 1,327 dollars per ounce. Gold ended the month with a loss of 4.7 percent, but closed the third quarter of the year with a gain of 8.8 percent, the first quarterly gain since Sept. 28, 2012. Contrary to one's thinking, a government shutdown is disinflationary by nature, but is by no means a booster to gold, market analysts say. Meanwhile, the uncertainty created by government shutdown points to the possibility of a credit downgrade, which will make interest rates even higher, which is negative for gold. Also, the uncertainty about when the U.S. Federal Reserve will start scaling down of bond purchases is also a factor weighing on investors. Market analysts believe that recent small bounces in gold were a result of investors' short covering instead of fresh buying. They predict tough technical resistance for gold at 1,340 dollars and 1,350 dollars per ounce. Silver for December delivery lost 12.3 cents, or 0.56 percent, to close at 21.708 dollars per ounce. Platinum for January delivery shed 6.8 dollars, or 0.48 percent, to close at 1,412.4 dollars per ounce.