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Gold Slips as U.S. Shutdown, Debt Ceiling Loom (Update 1)

Updated from 11:13 a.m. ET with analyst comment and settlement prices

NEW YORK (TheStreet) -- Gold prices slipped on Thursday as traders weighed the possibility of Congress avoiding a government shutdown.

If the House and Senate can't agree on a bill to fund the government by Sept. 30, operations will shut down for non-excepted federal workers.

Gold for December delivery at the COMEX division of the New York Mercantile Exchange lost $12.10 to settle at $1,324.10 an ounce. The gold price traded as high as $1,340 and as low as $1,319.20 an ounce, while the spot price was off $8.12 to $1,324.06.

Also looming is the prospect of the United States reaching its debt ceiling.

Must Read: Global Macro: What Influences GDX

"Last time we had this scenario, gold had a good move on the upside and there is no reason to suspect it may not do the same, should the two houses and the President attempt once again to play a game of brinkmanship," David Govett, head of precious metals at Marex Spectron, said in a note.

"The government is a little bit like Chicken Little: any investors out there, whether they're small or large, knows that there will be some twelfth-hour solution that doesn't shut down the government and not extend the debt limit."

Silver prices for December delivery lost 12 cents to $21.77 an ounce, while the U.S. dollar index was adding 0.25% to $80.55.

Gold mining stocks were mostly lower on Thursday, in line with the drop in gold prices.

Among volume leaders, Barrick Gold (ABX - Get Report) was losing 0.75%. AngloGold Ashanti (AU - Get Report) , one of the few gainers earlier, was sinking 1.3%. AngloGold Ashanti CEO Shrinivasan Venkatakrishnan told TheStreet in an interview that the company is still cutting costs and taking other measures to account for the new lower gold price environment.

Gold ETF SPDR Gold Trust (GLD) was off 0.9%.

-- Written by Joe Deaux in New York.

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