Gold Tumbles as U.S. Lawmakers are Willing to Raise the Debt Limit

Gold Tumbles as U.S. Lawmakers are Willing to Raise the Debt Limit
Gold Tumbles as U.S. Lawmakers are Willing to Raise the Debt Limit

Gold Tumbles as U.S. Lawmakers are Willing to Raise the Debt Limit

Amidst the news that U.S. lawmakers are willing to compromise on the nation’s debt limit and end a government shutdown, gold tumbled to a three-month low. The pessimistic outlook for the yellow metal can be judged from the fact that gold futures for December delivery fell 2.2 percent to settle at $1,268.20 an ounce in New York.

According to investors and traders, gold is heading for the first annual loss since 2000 which according to them is the biggest decline since 1981. The pessimism is so pervasive that some investors are losing their faith in gold as a store of value. Their concerns are aggravated by the fact that the Fed may slow the pace of its $85 billion monthly bond purchases.

Goldman Sachs Group Inc. and Morgan Stanley have already predicted that U.S. lawmakers will reach a resolution which will put back the focus on the Fed paring stimulus.

According to investors and traders, they may sell gold next year amid an extended economic recovery for greater profit.

Some analysts believe that as news are coming that central banks are monetizing their gold holdings which may add supply to an already weak market is further eroding the gold prices. The Bank of Japan is concerned about deflation, while India is still clamping down on their imports of gold, which is causing damage to the prices of gold.

India which has a lot of festivals this month and the next has huge demand for gold; however, as the government has imposed heavier duty on gold imports, gold is unable to penetrate the Indian market.


Debt Ceiling Solution Likely in the Next Week

According to the reports coming out from the Congress, President Barack Obama and House Republican leaders are moving towards an agreement to extend the nation’s borrowing authority. The parties are willing to show flexibility to solve the partial government shutdown which causes huge pain to the national and international economy.

According to financial analysts any positive move towards a settlement that would put the world’s largest economy back on track for recovery will be welcomed by traders and investors. They believe that if the two parties are agreeing to solve the partial shutdown and raise debt ceiling, it will pave the way for brighter global economy.
Gold Rush in Darfur, Inviting New Troubles

According to various reports more than 800 people have been killed and 150,000 displaced since January this year as Darfur is seeing a gold rush. In fact, the impoverished tribes in war torn Darfur, are facing genocide, in a pattern of Blood Diamond.

To contact the reporter of this story: Jonathan Millet at