Gold prices held steady on Monday amid a softer dollar as the US government shutdown due to a funding impasse unnerved investors. Spot gold was mostly unchanged at $1,331.57 an ounce by 0310 GMT. Spot gold fell 0.5 per cent last week, its first weekly decline in six weeks. US gold futures were up down 0.1 per cent at $1,331.30.
The dollar index , which measures the greenback against a basket of currencies fell as much as 0.5 per cent to 90.155. Funding for federal agencies ran out at midnight on Friday, and was not renewed amid a dispute between US President Donald Trump and Democrats over immigration.
Republican and Democratic leaders of the US Senate held talks on Sunday seeking to break an impasse that has kept the US government shut down for two days, but it was unclear if a deal could be struck to reopen federal agencies by the start of the work week.
“While the shutdown of government services in the US is not expected to last too long, traders are getting increasingly nervous about its impact on the economy,” ANZ analysts said in a note.
“Another strong week on equity markets is also starting to raise concerns about stretched valuations, which are also pushing some investors into the gold sector.”
SPR Gold Trust
Holdings of SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, rose 0.70 per cent to 846.67 tonnes on Friday from Thursday. SPDR holdings rose over 2 percent last week, their best week since week-ending September 3.
Adding a touch of bullishness to gold was data from the US Commodity Futures Trading Commission (CFTC), which showed that hedge funds and money managers had raised their net long position in COMEX gold contracts in the week to January 16,
Spot gold may revisit its January 18 low of $1,323.70 per ounce, as suggested by its wave pattern and a Fibonacci retracement analysis, according to Reuters technical analyst Wang Tao.
Among other precious metals, spot silver was up 0.1 per cent to $17.01. Platinum fell 0.1 per cent to $1,011.65, after touching its highest since September 8 at $1,015.20 on Friday. Palladium rose 0.1 per cent to $1,105.97 an ounce. It had touched record highs last week at $1,138.
Flows of palladium out of UK stocks to Hong Kong are picking up as demand from Asian industry grows, pointing to a tightening market that could keep record-high prices on the boil.