Bullions end moderately lower

They suffer monthly losses but register quarterly gains

Bullion prices ended lower at Comex on Monday, 30 September 2013. Comex gold futures prices ended the U.S. day session moderately lower on Monday.Focus of traders and investors worldwide is the U.S. budget impasse that threatens a partial shut- down of the U.S. government starting Tuesday which would be the first government shutdown in 17 years.

Gold for December delivery fell $12.20, or 0.9%, to settle at $1,327 an ounce on the Comex division of the New York Mercantile Exchange. Gold futures suffered monthly loss of about 5%, but jumped 8.4% for the quarter. The quarterly gain was the first since the quarter ended Sept. 28, 2012. As of Monday's close, gold futures have lost roughly 21% this year to date.

Like gold, silver settled lower for the session and month, but with a gain for the quarter. December silver shed 12 cents, or 0.6%, on Monday to close $21.71 an ounce. Prices lost 7.7% for the month, and rose 11.5% for the quarter.

There has been no apparent progress made by U.S. legislators on agreement on the U.S. budget. Also, in just two weeks the U.S. government will hit its borrowing limit. These issues are presently an underlying bearish factor for many markets and could become a major bearish factor in the next couple weeks.

Gold may be seeing some buying interest due to safe-haven demand amid the U.S. budget and spending debacle. However, it can also be argued recent selling pressure in gold was because it has acted more like a raw commodity ahead of the U.S. budget deadlines. It's likely one of these scenarios will more clearly come to the forefront for gold this week.

Economic data was limited to the September Chicago PMI report, which increased to 55.7 from 53.0 (consensus 53.7), representing the strongest reading since February. The Production Index improved to 58.0 from 53.0 with the increase completely due to continued strengthening in new orders. The new orders index increased to 58.9 from 57.2. Another month of accelerating production gains may not be in the cards. Order backlogs have contracted each of the previous four months, putting the index at 46.7. Without a steady supply of backlogs, production gains will completely rely on new orders, and maintaining new orders at their current elevated levels may be difficult.

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