The gold price could be found at $1,333.22 an ounce, about 0.1 percent down, at 16:00 BST.

US lawmakers have until midnight to resolve a standoff that might lead to most federal offices stop running for the first time in 17 years. The Republican-controlled House of Representatives has passed a measure that ties government funding to a one-year delay of President Barack Obama's Affordable Care Act, but the Democrat-controlled Senate has said that it will not support any budget bill that defunds or amends the law. If a short-term spending bill for the new fiscal year is not passed before midnight on Monday, this would cause a government shutdown.

The budget talk in the Congress has provided some support for the precious metal, but analysts see it as having a short term effect.

“Indirect support is being provided by the accelerating U.S. budget dispute,” Daniel Briesemann, an analyst at Commerzbank AG in Frankfurt, said in an e-mailed report today, as quoted by Bloomberg. “ETF investors are still retreating from the gold market, and on Friday alone 4.7 tons of gold were sold off.”

Tapering fears Gold has risen about eight percent this quarter, its biggest gain in a year, but it’s still some 20 percent down in the year due to concerns over the outlook for the US Federal Reserve’s quantitative easing programme, which has been a big driver for the gold price in recent years. While the Fed has for now maintained the QE at its current levels, analysts widely expect that it is only a matter of time before a reduction is announced. Some expect that a tapering might be announced as early as the Fed’s next policy meeting in October. Barnabas Gan, an analyst at OCBC Bank, has opined that the gold spot price might fall to $1,250 by the year’s end if the QE is reduced in October.

Precious metal to close Q3 with eight-percent gain Others believe that the US central bank will stick to its decision to maintain QE made at its September meeting.

"It seems to us that the central bank will likely stand pat again, perhaps not wanting to take two completely different directional views on rate policy in the span of just 30 days," INTL FCStone analyst Edward Meir wrote in a note, as quoted by Reuters.