Gold settles lower on hopes of US deal to avert default
Gold ended lower after a day of choppy trading on Thursday, on signs that lawmakers in Washington might reach a deal to avert a potential U.S. debt default, which boosted the dollar and discouraged safe-haven bids.
On Thursday, Republicans in the House of Representatives offered President Barack Obama a short-term increase in the federal debt limit if he will agree to negotiate with them on a broad range of financial issues.
Bullion was on track to fall for a third consecutive day, while the S&P 500 equities index rallied almost 2 percent and the dollar index trimmed initial gains but stayed higher.
Gold futures trading volume has been light this week. Prices remained rangebound, with buyers on the sidelines due to a lack of U.S. data and anxiety over the deadlock in Washington.
"When you don't have the big buyers coming in, it takes a lot to lift the market when you are relying on smaller players and physical buyers,'' said Thomas Capalbo, a precious metals broker at New York futures brokerage Newedge.
Gold's losses were limited by data that showed U.S. weekly jobless claims touched a six-month high last week as a computer-related backlog of claims was processed and a partial U.S. government shutdown began to hit some non-federal workers.
For more information about gold prices, please click here.