The price of gold declined this afternoon after US lawmakers finally agreed on a deal to raise the country’s debt ceiling, averting a debt default and reducing demand for safe haven assets.
The Republicans and Democrats reached an 11th hour agreement late on Sunday to raise the borrowing limit by US$2.4 trillion and cut budget expenses by about as much to fund the government until 2013.
Uncertainty over the US debt deal boosted demand for gold last week, driving it to new record highs of US$1,634/oz late on Friday.
However, even with the default fears gone, losses in gold were limited as many traders kept the yellow metal to protect wealth as the extent of the damage done to the global economy by the prolonged negotiations.
Gold was also pressured by a surge in the US dollar, which rebounded on the back of the debt agreement.
Gold traded at US$1,623/oz this afternoon, about US$ below Friday’s close. Silver headed in the same direction, dropping 29 cents to US$39.61/oz. Platinum rallied US$18 to US$1,793/oz.
Today’s top risers n the sector were:
Triple Plate Junction (LON:TPJ), up 12 percent at 6.02 pence at midday
Arian Silver (LON:AGQ), up 6.5 percent at 35.5 pence
African Mining & Exploration (LON:AME), up 4.5 percent at 8.62 pence
Caledonia Mining (LON:CMCL), up 4.5 percent at 6.39 pence
Medusa Mining (LON:MML), up 4 percent at 482.5 pence
The top fallers were:
Orsu Metals (LON:OSU), down 9.5 percent at 12 pence at midday
Oxus Gold (LON:OXS), down 6 percent at 0.8 pence
Stratex International (LON:STI), down 5 percent at 8.57 pence
Horizonte Minerals (LON:HZM), down 4 percent at 15 pence
Serabi Mining (LON:SRB), down 4 percent at 24.5 pence