Gold Spot Price Open: $1,280
Gold Spot Price Close: $1,320
Change in Gold Spot Price: +$40
Silver Spot Price Open: $21.43
Silver Spot Price Close: $21.87
Change in Silver Spot Price: +$0.44
Gold and silver both made hefty gains on Thursday as the government shutdown has officially come to an end. At the end of the day, gold picked up roughly 40 dollars while silver gained nearly half of a dollar.
Thanks to Congress’ last minute deal in regards to the budget and the debt ceiling, the US government shutdown was finally…shutdown. This meant that the over 800,000 government employees who have been out of work since the beginning of October can finally go back to their jobs. The end of the shutdown also ushered in a wide array of economic activity.
Today we saw the US Dollar decline to an 8 month low, while European and US stock markets alike performed poorly to say the least. All of this, as you might have expected, translated into some large, positive gains made by both gold and silver spot values.
While declining currencies and stocks naturally gave precious metals a boost, another factor aiding the long-term prospects for metals began to be taken into consideration by investors. This factor is that of the nature of both the debt ceiling and budget agreements produced by Congress. The agreements, which were signed late yesterday, only allow for the funding of government operations until the middle of January while the debt ceiling has only been raised to allow government borrowing until the beginning of February.
This means, in a few months, we may be facing the same exact shutdown scenario that we found ourselves facing less than a month ago. This fact has caused investors to become uneasy in regards to stocks and especially the US Dollar.
Over the last two weeks we have seen 0 US economic reports be released, which means that any assessments in regards to the current strength of the US economy are nothing more than speculation. One of those lines of speculation is that the US economy, specifically economic growth, will be hindered significantly by this shutdown; a statistic that is likely going to be illustrated in the 4th quarter GDP report. To that end, the supposed disruption to US economic growth will likely also postpone the Fed’s tapering of Quantitative Easing. Prior to the shutdown, investors and market experts were still convinced that QE would be altered by the end of the year, though that sentiment is being abandoned.
Now comes time for us to hold our breath and see if gold and silver can sustain, and perhaps even build upon, gains made over the past few days.
