The US government shutdown date i.e. tomorrow and the budget impasse have brought out positive turnover to the commodity market. The House of Representatives constituting Republican majority held meeting passed a bill to delay the Barck Obama’s health-care overhaul known as Obamacare for a period of one year. The bill is now sent to the Senate for approval. As President Obama himself is supporting this program, the preponderance of the Democrats in Senate is less likely to pass the bill. This will lead the government shutdown without passing the bill.

The two counterparts are looking forward for each other to blink first and break the log jam over the funding. If the negotiation does not establish between the Republicans and Democrats, it will lead to the historical recurrence of the 17 years ago political turmoil. The artifact of a budget battle between Democratic President Bill Clinton and Republicans led to the last government shutdown that ran from December 16, 1995, to January 6, 1996.

Also, on the other hand, there is risk of the US to default as the debt ceiling has not been increased from $16.7 trillion which would start showing its effects from mid-October. The fail to raise the debt ceiling would further create tumult in the US economy thus showing a trickledown effect over to the world economy. The confusion among the Republicans and Democrats has led to waning of the dollar and swing of the investors towards the safe haven-gold.

With the pending of the Fed’s tapering of $85 billion assets purchases this September till December end, the gold market with the standoff of fund has benefitted the price hike. The gold bullion for immediate delivery advanced by 1.3% and gold futures rose by 0.5% in the COMEX last week. As per the historical facts, September is seen as the seasonal bullish month for the yellow metal gold. So, the trend is still seen to continue this month as shown by the rise in gold prices today. As investors are eschewed by the emerging market securities and currencies; investors’ sentiment towards gold as an investment instrument still triumphs.