Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold dipped 0.2% to close just under $1,318 as traders sought liquidity in response to the ongoing U.S. government shutdown, now in its third day. Concerns are growing that the closure will roll into the debt-ceiling impasse, potentially forcing the government into default after October 17. The U.S. Treasury issued a warning today that failure to raise the debt limit could result in "a financial crisis and recession" echoing "the events of 2008 or worse."

U.S. equity markets rolled back, with the Dow losing nearly 140 points to close under 15,000 as investors shed risk. After dropping as low as $1,302 in intraday trading, gold reboudned $16 to nearly flat behind a weaker dollar, which fell to an eight-month low against the euro, and an ISM report that showed the U.S. services sector slowing more than expected in September. Dollar-weakness supports demand for gold, sliver, and other commodities that are denominated in dollars internationally because they become less expensive for holders of other currencies. Silver slid 0.5% while platinum and palladium, more directly tied to industrial demand, dropped 1.4% and 2.9%, respectively,

At the Comex close: December gold dipped $3.10 to $1,317.60; December silver slid 11 cents to $21.79; January platinum dropped $20.10 to $1,373.30; and December palladium tumbled $21 to $700.20 an ounce.