Gold little changed near 1-week high as U.S. debt woes remain in focus

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.