Thursday, October 17th 01:41 PM IST

Gold rises above $1300 as US law makers avoid temporary debt default

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US Gold futures for December delivery has climbed almost $10 to $1292 an ounce on electronic trading on Thursday. According to Jeff Nichols, Precious Metals Economist and Managing Director of American Precious Metals Advisors, uncertainty continues in the precious metals markets.

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NEW YORK (Commodity Online): US Gold futures has managed to climb back from a low of $1259.6 per ounce reached last week as US law makers passed a temporary bill to avert historical debt default and end a two-week long government shut down.

US Gold futures for December delivery has climbed almost $10 to $1292 an ounce on electronic trading on Thursday. According to Jeff Nichols, Precious Metals Economist and Managing Director of American Precious Metals Advisors, uncertainty continues in the precious metals markets.

Investors may start preferring to hold equities and debt once again following the temporary bill to avert debt default, Jeff Nichols said.

MKS sees signs of physical demand for gold picking up. Spot metal hit a three-month low of $1,251.80 an ounce Tuesday but has bounced since, trading at $1,281.85 shortly before 3 p.m. EDT Wednesday. MKS says with gold below $1,300 an ounce, “demand is ramping up from Far and Middle east. Even if the resolution of the (U.S.) debt ceiling could push the gold lower on short term, we anticipate a recovery after the correction. But for the moment, Comex open interest suggests that new shorts are being added.”Spot Gold has risen above $1300 and trading at $1312 an ounce, according to Kitco News.

-Holdings of SPDR Gold Trust GLD, the world's largest gold-backed exchange-traded fund, fell 3.6 tonnes to 885.53 tonnes on Wednesday - hitting fresh four-year lows.-The fund has seen over 400 tonnes in outflows this year, dampening investor sentiment.

-Gold has fallen about 4 percent since the government shutdown began on Oct. 1, dropping below $1,300 an ounce, as the metal failed to receive strong safe-haven bids.

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