Gold Prices Surge amidst the Federal Government Facing a Shutdown Next Week
Gold prices surged and ended up about 1.0 percent on Friday trading. According to investors the surge was due to a possible shutdown of the U.S. government operations next week and the threat of a debt default in mid-October. Spot gold stood 1.14 percent higher at $1,338.95 an ounce by late in the New York session.
The price of $1,338.95 an ounce is just off the one week high set earlier at $1,343.80 an ounce. An increase has also been seen in futures as U.S. gold futures for December delivery were up $14.70 an ounce which is an increase of 1.11 percent, at $1,338.80 an ounce. Silver was also up 0.18 percent at $21.71 an ounce with gold.
Demand of Gold from China
According to the China Gold Association, the country’s gold output was 232.189 tonnes in the first seven months of this year which is an increase of 11.5 percent from the same period of 2012. The association also informed that output in the month of July alone stood at 39.367 tonnes.
However, several other reports claim that demand for physical gold was weak as traders in Hong Kong reveal that premiums on the Shanghai Gold Exchange to London spot prices fell to multi-month lows of $7 an ounce this week from about $30 in April-May.
Moreover, as the Chinese markets will be closed from October 1st to 7th, some gold shipments to the country have been postponed by a few weeks.
Gold Prices to Increase in India in Coming Months
As the festival season starts from the next month, the demand for gold will increase. In the past week’s trading the gold price surged to a three-week high to Rs 31,200 per ten grams. It was the most prominent feature of trading on the bullion market during the past week. Like gold, silver also ended higher on increased offtake by industrial units and coin makers before the festive seasons where these are used as gift items.
The demand for gold of 99.9 and 99.5 per cent purity commenced lower. Whereas 99.9 per cent purity was valued at Rs 30,250, 99.5 per cent purity stood at Rs 30,050. The value of 99.9 and 99.5 per cent purity gold slipped further to Rs 30,200 and Rs 30,000 per ten grams, respectively. This happened due to sluggish demand which is going to increase in the coming weeks as soon as festival season starts and people buy gold and silver as it is considered auspicious.
To contact the reporter of this story: Jonathan Millet at email@example.com