PRECIOUS-Gold up about 1 pct on U.S. debt ceiling crisis, S&P down

Mon Oct 7, 2013 3:36pm EDT

* Markets turn focus to debt-ceiling deadline on Oct 17
    * Gold, Treasuries gain while U.S. equities, dollar fall
    * U.S. Comex futures volume thin despite Monday's rally
    * Coming up: Philly Fed's Charles Plosser to speak Tuesday

 (Adds comment, updates market activity)
    By Frank Tang and Clara Denina 
    NEW YORK/LONDON, Oct 7 (Reuters) - Gold rose nearly 1
percent on Monday as the ongoing U.S. government shutdown and no
signs politicians were willing to resolve a budget impasse and
raise the debt-ceiling limit boosted the metal's safe-haven
appeal.
    The White House on Monday reiterated that President Barack
Obama would not negotiate with Republicans over the threat of a
debt default, as stock prices fell and the federal government
shutdown neared its second week. Other safe-haven markets, such
as U.S. Treasuries, were higher. 
    Even though reactions to the deadlock in Washington from
gold and other financial markets have so far been mild, analysts
said that bullion should benefit from the uncertainty related to
a possible U.S. default if Congress fails to raise the U.S. debt
limit by Oct. 17.
    "The longer the shutdown, the longer the issue of debt
ceiling crisis, gold will likely be increasingly supported,"
said Carlos Sanchez, director of commodities and asset
management at CPM Group.
    During the last debate over the U.S. debt ceiling, in 2011,
gold hit an all-time high of $1,920 an ounce. Congress reached
an agreement only at the last minute. 
    Spot gold was up 0.8 percent at $1,321.01 an ounce by
2:55 p.m. EDT (1855 GMT), having earlier reached its highest
since Oct. 1 at $1,327.94.
    U.S. gold futures for December settled up $15.20 an
ounce at $1,325.10.
    Despite Monday's rally, preliminary Reuters data showed
Comex gold futures trading volume at less than 95,000 lots,
about 40 percent below its 30-day average.
    Traders said that recent weak futures turnover underscored a
lack of commitment among bullion investors in spite of the
uncertainty.
    After gold prices fell last week due to several large sell
orders, the precious metal rally resumed, driven by U.S.
political uncertainty, analysts said. 
    "There is flight-to-safety buying all the way across from
bonds to currencies to metals," said Bill O'Neill, partner of
commodities investment firm LOGIC Advisors.
    Other financial markets largely reflected investor jitters
over the U.S. debt ceiling, with the S&P 500 equities index
 down about 0.5 percent, while U.S. Treasury bond prices
rose and the dollar index fell.   
    In other precious metals, silver was up 2.9 percent
at $22.28, having earlier hit a two-week high at $22.44. 
    Platinum gained 1.2 percent to $1,396.49 an ounce
after a 1.3 percent increase on Friday, as mine strikes and
curbs in top platinum producer South Africa threatened to hurt
supply. 
    Palladium rose 0.4 percent to $699.47 an ounce.
 2:55 PM EDT     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold DEC   1325.10  15.20   1.2  1307.90 1329.50   89,929
 US Silver DEC  22.386  0.634   2.9   21.650  22.495   29,434
 US Plat JAN   1401.90  13.90   1.0  1384.20 1404.60    6,660
 US Pall DEC    705.35   3.40   0.5   695.60  706.00    2,975
                                                              
 Gold          1321.01  10.40   0.8  1309.08 1327.94         
 Silver         22.280  0.630   2.9   21.660  22.440
 Platinum      1396.49  15.89   1.2  1385.00 1399.74
 Palladium      699.47   2.47   0.4   698.02  702.97
                                                              
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold         93,302   165,070   189,589      23.7   -0.37
 US Silver       31,402    57,802    57,455     33.28   -0.14
 US Platinum      7,404    14,990    13,010     20.42    0.00
 US Palladium     3,031     5,846     5,788                  
                                                              
    

 (Additional reporting by A. Ananthalakshmi in; Singapore;
Editing by Keiron Henderson, Dale Hudson, Nick Zieminski and Jim
Marshall)
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