Gold price shows little reaction to US debt, shutdown deal

The gold price showed little reaction to the apparent end of the crisis in Washington on Wednesday, hovering around its opening levels of 1,273 an ounce on the news of a likely deal.

At 12:30 EST in trade on the Comex market in New York December gold futures changed hands at $1,273.50, well off its highs for the day of $1,289 an ounce.

According to reports senate leaders agreed on a plan to fund the federal government through January 15 and lift the debt ceiling for government borrowing to continue till February 7.

A committee to iron out wider budget issues will be formed with a deadline of December 13 to report on a new budget plan. The Senate and House still need to vote on the agreement.

Contrary to conventional wisdom in the gold market, the metal didn't capitalize on its status as a safe haven during the negotiations between Republicans and Democrats to end the US government shutdown and to lift the country's debt ceiling.

Gold remains around 1% below the levels it traded at on September 30, the day before the shutdown began, failing to attract safe haven buying ahead of a possible default which would have wreaked havoc on global financial markets.