The most active gold contract for December delivery dropped USD 40.9, or 3.08 percent, to settle at USD 1,286.1 per ounce, Xinhua reported.
It is widely believed that the US government shutdown would be short-lived, with only minimal impact on the broader economy and would not change the Federal Reserve's time-table on retreating from its quantitative easing monetary policy.
However, if the impasse persists within the next 17 days, it could produce a negative impact on the dollar and may lead to a downgrade in the US sovereign credit rating, eroding the world's confidence in the US economy and pushing up gold prices, market analysts said.
Silver for December delivery lost 53.3 cents or 2.46 percent to settle at USD 21.175 per ounce. Platinum for January delivery shed USD 27.1 or 1.92 percent to USD 1,385.3 per ounce.
--IANS (Posted on 02-10-2013)