Gold flat after U.S. government shutdown ends

By Renita D. Young and Maytaal Angel

NEW YORK/LONDON (Reuters) - Gold steadied on Monday as the dollar hovered near three-year lows, but bullishness in the wider financial markets as the U.S. government shutdown ended capped the metal's gains.

Before coming off its highs, platinum hit another four-month peak, earlier narrowing the price gap to sister metal palladium to below $100 per ounce.

The U.S. Senate voted to pass a temporary spending plan through Feb. 8 to end the government shutdown.

The dollar pared losses against a basket of currencies and U.S. stocks surged in afternoon trading after senators reached the deal, ending the 2-1/2-day shutdown that world markets had largely taken in stride.

"Gold's relatively muted today. Most people were looking at the U.S. government shutdown. Historically you don't really get much market reaction to this," said Daniel Ghali, commodities strategist at TD Securities in Toronto.

Spot gold edged up 0.05 percent at $1,332.13 per ounce by 1:47 p.m. EST (1847 GMT). The precious metal fell 0.5 percent last week, its first weekly decline in six weeks, after hitting four-month highs last Monday.

U.S. gold futures for February delivery settled down $1.20, or 0.1 percent, at $1,331.90 per ounce.

Platinum dropped 2.1 percent to $991.74 an ounce, after earlier touching its highest since Sept. 8 at $1,018.80, while palladium fell 0.7 percent to $1,096.97 an ounce.

"As prices edged above $1,000 per ounce, some money managers might have wanted to take some profits," Ghali said of platinum, which has had a sustained rally since mid-December.

"Recent implementation of more stringent emissions standards in China is expected to boost demand for (platinum)," SP Angel said in a note.

"Stockpiles in warehouses tracked by the New York Mercantile Exchange have shrunk to their lowest since 2016. With 70 percent of global supply sourced in South Africa, improving rand-dollar exchange is raising the relative cost of producing the metal," it added.

U.S. Treasury yields, which have tended to fall during previous government shutdowns, rose as investors saw limited economic fallout from the political standoff and focused instead on a global economy motoring ahead and U.S. inflation pressures.

Rising yields tend to weigh on gold by increasing the opportunity cost of holding non-yielding bullion.

Silver was down 0.2 percent at $16.97 an ounce.

(Additional reporting by Nallur Sethuraman in Bengaluru; Editing by Dale Hudson and Tom Brown)