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Gold Prices Gain about 1% As Wrangling Over Budget Keep Investors Edgy; Silver Prices Also Gain

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Gold prices gained about 1% on Friday as continued impasse in Washington over debt-ceiling issue encouraged investors to take fresh bets on safe-haven assets. Broadly lower U.S. dollar also supported the rally. Silver prices also edged higher in trading on Friday.

The dollar index fell to its seven-month low on Friday, making dollar-dominated commodities cheaper for traders dealing in other currencies. Equities meanwhile fell as investors remained risk-averse.

At last check, gold futures for December delivery climbed 1.04% to $1,337.90 an ounce while spot gold jumped 1.11% to $1,337.80 an ounce.

The SPDR Gold Trust (ETF) (NYSE: GLD) was last up 1.16% to $129.27.

In order to enable the federal government raise its borrowing limit, lawmakers need to reach an agreement before October 1. In case, the logjam continues then it could result in partial shutdown of the government agencies and could also potentially result in a historic U.S. debt default. However, market participants expect that lawmakers will find some middle path.

The uncertainty over the Federal Reserve’s monetary policy ($85 billion worth monthly bond purchase program) is another factor which is keeping bullion investors edgy.

Last week, the Federal Reserve wrong-footed investors by opting not to scale down its economic stimulating measures.

Gold prices have been hovering in the range of $1,310 to 1,350 in the recent past as investors are clueless over when the bank might start winding down its gold supportive bond purchase program.

Silver futures edged up 0.18% to $21.80 an ounce.

In late trading, the iShares Silver Trust (ETF) (NYSE: SLV) was up 0.31%, and the ProShares Ultra Silver (ETF) (NYSE: AGQ) was up 0.70%.








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edliston
Post Written By: Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.

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Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing.

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