Gold futures were little changed near a one-week high on Tuesday, as ongoing uncertainty over the U.S. government shutdown and the upcoming debt ceiling debate continued to support the precious metal.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,326.50 a troy ounce during European morning hours, up 0.1%.
Prices traded in range between USD1,320.90 a troy ounce, the daily low and a session high of USD1,328.10 a troy ounce.
The December contract ended 1.16% higher on Monday to settle at USD1,325.10 a troy ounce, after climbing to a session high of USD1,328.60, the strongest level since October 1.
Gold futures were likely to find support at USD1,278.20 a troy ounce, the low from October 2 and resistance at USD1,337.80, the high from October 1.
Investors continued to monitor negotiations over a U.S. budget impasse that has kept the federal government shut down since October 1.
Markets were also mulling over how the political deadlock in Washington will impact on negotiations to raise the U.S. debt ceiling, which the U.S. Treasury Department has estimated will be reached by October 17.
President Barack Obama repeated Monday that he is willing to negotiate with congressional Republicans on a range of topics, including healthcare and energy policy, but only after the government is reopened.
Republican House Speaker John Boehner said Sunday the House will not support bills to fully reopen the government or increase the U.S. debt ceiling unless Democrats agree to talks about spending cuts.
Meanwhile, delays in U.S. economic data releases fuelled speculation that the Federal Reserve will hold off on any move to scale back its stimulus program.
Gold traders will be looking ahead to Wednesday's minutes of the Fed's most recent policy-setting meeting for further clues on the direction of U.S. monetary policy.
The Fed took markets by surprise last month with a decision to keep its stimulus program on track, saying it wanted to see more evidence of a sustained economic recovery before tapering.
The central bank is scheduled to meet October 29-30 to review the economy and assess policy.
Elsewhere on the Comex, silver for December delivery inched up 0.1% to trade at USD22.40 a troy ounce, while copper for December delivery added 0.35% to trade at USD3.308 a pound. 

Commodity Contract S2 S1 R1 R2

Gold was higher today as equities continued to slide while U.S. lawmakers remain deadlocked over the government shutdown and the debt ceiling debate. Gold opened at 1318.50/1319.50, touched a low of 1316.50/1317.50 before jumping to a session high of 1329.00/1330.00 around midmorning. The metal closed at 1324.50/1325.50. 

Gold closed higher today at 1324. Support is at the recent low of 1277 from October 2. Resistance is at the recent high of 1375 from September 19. We are currently neutral, but would view it as a positive development if gold holds key support at 1273.

Gold gained as investors assessed the impact of a lower dollar after politicians in Washington showed no signs of making progress to resolve the U.S. budget standoff.

Investors are increasingly worried that the political standoff in Washington will spark greater market volatility as the October 17 deadline to raise the borrowing limit.

Any pick up in physical demand, especially from China which returns from its week-long National Day holiday on Tuesday, will also be in focus.

Silver also traded higher on the day. After trading sideways overnight, silver opened the week at 21.89/21.94. Price bottomed at 21.88/21.93 early on, before advancing to a high of 22.45/22.50 as investors fled to safety. The metal closed the day near the high, at 22.35/22.40.

Silver closed higher today at 22.35, breaking through congestion in the low 22's to reach a new 2 week high. Price action since the June 28th low at 18.23 is consistent with silver having formed a bottom; however, it is too early to make this conclusion. Resistance is at the recent high of 23.42 from September 19th. Support is at the recent low (from October 1) at 20.62. The gold-silver ratio had a bearish move today, closing much lower at 59.28. The next support is 58.86, which is the 50% retracement of the November to August uptrend. We are bearish the ratio, targeting a full retracement to 57.09, the low from August 2013.

Silver rose as uncertainty over the U.S. government shutdown and the upcoming debt ceiling debate boosted the safe-haven appeal.

Delays in U.S. economic data releases fuelled speculation that the Federal Reserve will hold off on any move to scale back its stimulus program.

The central bank is scheduled to meet October 29-30 to review the economy and assess policy.

On the Comex division of the New YorkMercantile Exchange, copper futures for December delivery traded at USD3.271 a pound during European morning trade, down 0.9%. 

Copper prices fell by as much as 1.1% earlier in the day to hit a session low of USD3.264 a pound. The December contract settled 1% higher at USD3.301 a pound on Friday.

Copper prices were likely to find support at USD3.249 a pound, the low from October 2 and resistance at USD3.324 a pound, the high from October 3.

Copper futures fell sharply on Monday, as comments made over the weekend by Republican House Speaker John Boehner stoked fears that the political deadlock in Washington will not be resolved by October 17, the date which the Treasury Department has estimated the U.S. could risk an unprecedented default.

Copper settled flat as prices seen under pressure amid concerns over the global economic outlook.

The World Bank lowered its outlook on Chinese GDP growth to 7.5%, down from 8.3% and below the 7.5% the IMF previously forecast.

Investors continued to monitor negotiations over a U.S. budget impasse that has kept the federal government shut down since October 1.

On the New York Mercantile Exchange, light, sweet crude futures for November delivery inched up 0.05% to USD103.08 per barrel in Asian trading Tuesday. The November contract settled down 0.78% at USD103.03 per barrel Monday.

Tropical Storm Karen dissipated in the Gulf of Mexico over the weekend, prompting energy companies to begin reopening rigs and bring production back to normal, which softened prices. 

Although the U.S. dollar fell due to the ongoing shutdown, riskier assets like stocks and oil were imperiled as traders sough out safe-haven investments. An impasse among U.S. lawmakers and the White House over terms needed to create a spending package and reopen the government sent investors avoiding the dollar on Monday.

Oil futures traded modestly higher during Tuesday's Asian session even as the first U.S. government shutdown in 17 years lingered into a seventh day.

Crude oil dropped as oil production resumed in the Gulf of Mexico after a tropical storm.

Tropical Storm Karen led producers to shut in nearly two-thirds of oil output in the Gulf of Mexico last week.

The Gulf of Mexico accounts for about 1.3 million barrels per day (bpd), nearly a fifth of U.S. oil output.