VINACHEM

Gold climbed from the lowest level ineight weeks as investors weighed the first U.S. governmentshutdown in 17 years and the outlook for monetary stimulus fromthe U.S. Federal Reserve.

Bullion for immediate delivery rose as much as 0.5 percentto $1,293.60 an ounce, and traded at $1,292.41 at 2:10 p.m. in Singapore. Prices, which tumbled 3.1 percent yesterday onspeculation that the closure will be short-lived, rebounded froma 0.8 percent drop to $1,277.15, the lowest since Aug. 7.

Lawmakers are deadlocked in budget talks for the fiscalyear that began yesterday, triggering the shutdown that riskshurting growth and stoking speculation the Fed may delayreducing its $85 billion-a-month of bond buying if the closureis protracted. Markets are overconfident that the stalemate in Washington will be resolved in time to avoid major economicdamage, said White House economic adviser Gene Sperling.

“Between the U.S. government shutdown and Fed tapering,the risk to markets are nowhere near gone,” Jordan Eliseo,chief economist at the Australian Bullion Company Ltd., said byphone from Sydney. “Some people still look to gold to hedgeagainst economic uncertainty. The bigger issues are the debtceiling debate and the month-to-month decisions by the Fed.”

Gold for December delivery climbed 0.5 percent to $1,292.10an ounce on the Comex in New York in trading that was 6.6percent below the average for the past 100 days for this time ofday, data compiled by Bloomberg show. Most-active futures havelost 23 percent this year on speculation the U.S. central bankmay scale back the quantitative-easing program.

Extraordinary Measures

The shutdown could cost the U.S economy as much as $10billion a week, the White House said on its website. The U.S.has begun using the final extraordinary measures, which will beexhausted no later than Oct. 17, to avoid breaching the nation’sdebt limit, Treasury Secretary Jacob J. Lew said in a letteraddressed to House Speaker John Boehner.

Silver for immediate delivery fell as much as 1 percent to$20.9771 an ounce, after dropping to $20.6217 yesterday, thelowest since Aug. 12. It traded at $21.1565 today. Platinum waslittle changed at $1,385.30 an ounce after falling to $1,373.68yesterday, the lowest since July 11. Spot palladium was alsolittle changed at $720.18 an ounce.