Prices recoup back most of Tuesday's heavy losses
Comex gold prices ended the U.S. day session sharply higher on Wednesday, 02 October 2013 and took back most of Tuesday's heavy losses. The anxiety regarding the U.S. government shutdown and U.S. lawmakers' impasse on agreeing to a federal budget ratcheted up a notch Wednesday, as the partial government closure entered its second day. Gold also found support following disappointing data on U.S. private-sector employment.
December gold rose for the first time in three sessions, lifting from its session high of $1297.30 per ounce. It settled 2.7% higher at $1320.70 per ounce, just below its session high of $1324.20 per ounce.
December silver brushed a session high of $22.04 per ounce in late morning floor action and eventually settled with a 3.6% gain at $21.92 per ounce.
The marketplace greeted the partial U.S. government shutdown with some increased anxiety on Wednesday but certainly not panic. Asian and European stock markets overnight focused on other matters. There are mixed ideas in the market place regarding how long the U.S. lawmakers will let the government remain closed.
U.S. government reports have been postponed due to the government furloughs, including Friday's monthly employment report. Non-government U.S. economic reports will be issued as scheduled. The ADP national employment report was released at about the time the Comex futures market opened Wednesday morning. It showed a U.S. jobs gain of 166,000 in September, which was slightly less than market expectations.
Wednesday's European Central Bank meeting resulted in no changes in ECB monetary policy, which supported the Euro currency and added downside pressure to the greenback. The monthly press conference by ECB president Mario Draghi produced no major pronouncements, but Draghi did express concern about the U.S. government shutdown impacting major world economies, if the matter is not resolved soon. There has been some speculation in the market place that the ECB could at some point launch another round of monetary stimulus measures.
The latest German government bond auction Wednesday saw 10-year bond yields drop sharply, as demand for safe-haven German debt increased due to the U.S. government shutdown.
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