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Gold Attempts to Rebound After Big Slump

October 2, 2013 at 3:37 by Vladimir Vyun

Gold slumped as traders were assessing the impact of the US government shutdown on the nation’s economy. US politicians were unable to reach an agreement about the budget ahead of the deadline and most government services are in process of shutting down. The precious metal has rallied initially, but slumped later. Currently, it attempts to rebound, but still is very weak.

It was a surprise to see such a big slump when analysts have expected investors to flock to gold in search of safety. The shutdown makes quantitative easing tampering a lot less likely in October, while it is not clear whether US nonfarm payrolls will be released this week. These factors are negative for the dollar and, consequently, positive for the metal. Yet the US currency was not bothered, while gold dropped sharply.

December futures for gold ticked up $6.6 (0.51 percent) to $1,292.7 per troy ounce as of 3:29 GMT on COMEX today after tumbling as much as 3.1 percent yesterday.

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