Monday Open: $1,332.00
Weekly High: $1,335.00
Weekly Low: $1,283.30
Friday Close: $1,310.80
The U.S. government shut down was on the forefront of all world markets this week, including gold. Though the shut down does imply some bullish factors for the yellow metal, the volatility of the market proved to be bearish overall.
Monday exhibited a strong holding pattern for gold as the U.S. government hinted at a failure to come to compromise by the first of October. On this last day of the month, Monday, short-term trading held steady, as speculators imagined gold could shoot up as safe haven, or drop down on rampant uncertainties everywhere.
On Tuesday, October 1st, the U.S. government did indeed “shut down,” as lawmakers could not reach a conclusion to pass a budget. House Republicans have brought the Affordable Care Act to the spotlight, as they have purposefully left out funding for the program, which Senate Democrats have refused to pass. With U.S. politicking so volatile, the yellow metal took a turn for the worst on Tuesday. Gold acted more as a commodity than a currency on Tuesday as traders left the market to force gold into a seven-week low.
Wednesday showed some short-term recovery as others entered the gold market on bargain hunting, but no progress was made between the House and the Senate, so the price of gold stayed pretty steady until the end of the week. Economic reports due out Friday were not released since government employees were on furlough.
Thursday and Friday marked the third and fourth days of the U.S. partial government shut down. The price of gold stayed low, and the general feeling in the market place is one of extreme uncertainty, but not quite panic. There are signs that this shut down could be bullish for gold long term, since the drag on the economy may encourage the Federal Reserve to extend its quantitative easing program.
Leave a Reply