Debarati Roy & Nicholas Larkin
October 14, 2013
Gold advanced the most in a week as U.S. lawmakers struggled to reach an accord on raising the nation’s debt limit, increasing demand for the precious metal as a haven.
With the U.S.’s borrowing authority set to lapse Oct. 17, Senate Majority Leader Harry Reid said yesterday that he had a “productive conversation” with Minority Leader Mitch McConnell, without reaching a conclusion on a plan to send to the chamber for a vote. Bullion dropped to a three-month low last week on speculation that the lawmakers would reach an agreement to raise the debt ceiling and end a government shutdown.
“Demand for gold is on the rise as it’s not apparent anymore that the parties will reach an agreement before the deadline,” Bart Melek, the head of commodity strategy at TD Securities in Toronto, said in a telephone interview.
Gold futures for December delivery added 1.1 percent to $1,282.60 at 9:40 a.m. on the Comex in New York, heading for the biggest jump for a most-active contract since Oct. 7. Trading was 26 percent below the average for the past 100 days for this time of day, data compiled by Bloomberg showed.