Gold settled up 1.36% at 29486 as the ongoing US government shutdown and no signs politicians were willing to resolve a budget impasse and raise the debt-ceiling limit boosted the metal's safe-haven appeal. The White House on Monday reiterated that President Obama would not negotiate with Republicans over the threat of a debt default, as stock prices fell and the federal government shutdown neared its second week. Even though reactions to the deadlock in Washington from gold and other financial markets have so far been mild, bullion should benefit from the uncertainty related to a possible US default if Congress fails to raise the US debt limit by Oct. 17. An impasse among US lawmakers and the White House over terms needed to create a spending package and reopen the government sent investors avoiding the dollar on Monday. Markets were also growing increasingly worried that the deadlock will affect negotiations to raise the US debt ceiling, which the US Treasury Department has estimated will be reached by Oct. 17, after which the risk of default rises. Republican House Speaker said Sunday the House will not support bills to fully reopen the government or increase the government debt ceiling unless the Obama administration agrees to talks aimed at reducing the deficit. A US default could roil markets and slow US recovery by further eroding confidence in Washington's ability to craft economic policy. While Gold importers in India, started processing orders to re-stock ahead of the peak wedding and festival season after the customs department cleared remaining consignments at a major airport. Technically market is getting support at 29271 and below same could see a test of 29057 level, And resistance is now likely to be seen at 29639, a move above could see prices testing 29793.

Trading Ideas:

Gold trading range for the day is 29057-29793.

Gold gained as investors assessed the impact of a lower dollar after politicians in Washington showed no signs of making progress to resolve the U. S. budget standoff.

Investors are increasingly worried that the political standoff in Washington will spark greater market volatility as the October 17 deadline to raise the borrowing limit.

Any pick up in physical demand, especially from China which returns from its week-long National Day holiday on Tuesday, will also be in focus.