Singapore: Gold held near one-and-a-half-week highs above USD 1,300 an ounce on Monday, supported by expectations the Federal Reserve would hold off curbing its economic stimulus while the United States eyes a more lasting fix to its budget problems.
Gold posted its best weekly gain in two months last week after US lawmakers reached a last-minute deal that averted a debt default and reopened government agencies that were shut for 16 days.FUNDAMENTALS
Spot gold had risen 0.1 percent to USD 1,317.39 an ounce by 0046 GMT. The metal touched USD 1,325.21 on Friday, its highest since October 8. It rose 3.4 percent last week.
US gold futures edged up 0.2 percent to USD 1,317.50 an ounce.
The US budget deal extends the US government`s borrowing authority through February 7 and restores federal funding through January 15, suggesting a similar crisis may happen again unless Congress comes up with a permanent solution.
Spot gold surged 3 percent when the deal was announced on October 17 on hopes the temporary fix would allow the Fed to delay its planned stimulus tapering. Top Fed officials have suggested that any decision to trim the monthly bond purchases will be likely deferred until at least December.
Exports of gold jewellery from India rose for a second straight month in September and were set to gain momentum going forward as supply pressures had been eased for exporters before the peak Christmas season in the United States.
Holdings of the largest gold-backed exchange-traded-fund, New York`s SPDR Gold Trust GLD, dropped 0.4 percent on Thursday from Wednesday.
Goldman Sachs maintained its end-2014 gold price target of USD 1,050 an ounce, saying the precious metal is still waiting for data confirmation of a US rebound that can support tapering even as the lack of a lasting US resolution could delay tapering.
First Published: Monday, October 21, 2013, 09:43