Gold fell on Monday as investor concern about debt default in the US, the world\'s largest economy, receded after President Barack Obama announced a last-minute deal to raise the country\'s borrowing limit. Spot gold was bid at $1,615.59 a troy ounce, by 1036 GMT, down 0.7 per cent from $1,626.59 an ounce late on Friday. Earlier yesterday the precious metal fell more than one per cent to a low of $1,607.69 an ounce, off a record high of $1,632.30 hit on Friday. \"It\'s risk-off at the moment. The fact that gold hit an all-time high on Friday and is off today reflects the mood that the risk [of a US default] has diminished over the course of the weekend,\" said Ross Norman of Sharps Pixley. Republican and Democratic lawmakers were expected to vote yesterday on the deal to raise the US borrowing limit and cut about $2.4 trillion from the deficit over the next decade. Article continues below While the deal comes just in time for the August 2 deadline, uncertainty remains over whether it will be enough for country to maintain its top-notch credit rating, keeping gold\'s appeal as a hedge against risk intact. \"This [plan to raise the debt ceiling] is only one step and the US will still have issues to face looking ahead so it\'s not an end to the gold bull,\" Norman said. The dollar enjoyed a relief rally against the yen and Swiss franc also weighed on precious metals. A higher US currency gold is more expensive for holders of other currencies. The most-active US gold futures fell more than 1 per cent to $1,608.2, but recovered to trade down 0.8 per cent at $1,618.50 an ounce. Despite yesterday\'s slide, economic and political uncertainty are expected to keep gold attractive to investors. Ongoing jitters about the Eurozone\'s debt crisis will also boost gold market sentiment. \"The prospect of a powerful rally in gold reflects ongoing stress in the financial system and the maintenance of super low interest rates,\" Deutsche Bank analyst said in a note. Gold has in recent years gained from historically low interest rates, which means there is little or no opportunity cost to holding the precious metal, which pays no dividends or interest. \"There also appears to be a strong perception among investors that gold can provide protection in environments of inflation and deflation,\" Deutsche said. \"Consequently, in almost any economic scenario today the advancing gold price appears to be irreversible.\" In South Africa, coal and gold miners will meet the Chamber of Mines in separate talks yesterday in a bid to end stoppages that have cost Africa\'s largest economy tens of millions of dollars in lost output.