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Gold Up 2.4% On Government Shutdown and U.S. Default Risk On October 17
Today’s AM fix was USD 1,309.00, EUR 961.58 and GBP 806.63 per ounce.
Yesterday’s AM fix was USD 1,293.75, EUR 955.93 and GBP 797.92 per ounce.
Gold climbed $26.10 or 2.02% yesterday, closing at $1,316/oz. Silver rose $0.52 or 2.46%, closing at $21.70. Platinum inched up $13.65 or 1% to $1,388.25/oz, while palladium climbed $2.38 or 0.3% to $717.38/oz.
Gold in USD, 5 Day - (Bloomberg)
Gold recouped much of Tuesday's peculiar flash crash losses and rose by 2.4% yesterday rebounding some $40 from a two month low at $1,278.24/oz earlier in the session. Deepening concerns about the government shutdown, poor jobs data and the growing risk of a U.S. default led to dollar weakness and a fall in equities.
Gold in GBP, 5 Day - (Bloomberg)
The partial government shutdown in Washington has entered a third day, adding to concerns over how soon a political compromise would be reached. Congress must also agree to raise the debt limit in just two weeks on October 17th or risk a default that will likely cause turmoil in global markets.
In a reversal of Tuesday's market, the S&P 500 index fell while safe havens such as U.S. Treasuries and gold rose and has consolidated on those gains overnight in Asia and in Europe.
Importantly, volume was higher than the previous day when prices fell sharply and volume was about 5% above its 30-day average, preliminary Reuters data showed.
Gold's inflation hedge appeal was boosted after the European Central Bank's chief, Mario Draghi, said the ECB is watching moves in market interest rates closely and is ready to do “whatever is needed.”
On Tuesday, gold futures posted their biggest daily percentage drop in more than two weeks, following a big Comex sell order and technical selling once prices fell below $1,300 an ounce.
Gold in Euros, 5 Day - (Bloomberg)
The flash crash on Tuesday led to renewed market talk of manipulation on the COMEX.
CFTC regulator, Bart Chilton, implied that manipulation may have been the cause of the sharp sell off which came out of the blue, with no data released or news flow and without corresponding moves in other markets.
One theory put forward was that it was forced liquidation by a distressed commodities fund and selling related to a fund rebalancing on the first day of the fourth quarter, although the speculation could not be confirmed by Reuters.
While the U.S. government has had shutdowns before, including one 17 years ago during the Clinton administration, never before has the U.S. been in such an appalling fiscal state.
The U.S. government is essentially bankrupt with a national debt of nearly $17 trillion and unfunded liabilities of between $100 trillion and $220 trillion.
This will lead to a lower dollar and much higher gold and silver prices in the coming months and years.
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Gold continues to show weak movements as it drifts up and down. There has been no expected movement at all. Cyprus? meh, taper? whatever....decreasing production expected due to increased production costs?, increased purchases by China???
Nothing seems to matter as gold drifts ever lower for 2 years now.
GLD inventories are dropping since January 2013...now down 450 tons to just over 900... so far fofoa has the only explanation that ties it all together.
I'm open to hearing some other explanation but to shout 'manipulation' at every drop and 'rally' at every recovery is not a unifying theory.
i wouldn't exactly call it drifting. Not when it gets bludgeoned every time it gets up next 1340....clearly that's some sort of derivative tipping point now. whatever. they can take it to 200 and i'll just buy more.
All these bizarre and unpredictable moves in the gold 'market' are just noise created by the cartel to keep investors away from the metals. It is part of their overall program to ruin the 'moneyness' feature of gold, so investors are discouraged from seeing precious metals as an escape from the otherwise all-encompassing financial repression involved in continuing massive inflation (devaluation) of the dollar. There will be no default; we are in default now, with the Fed administering the devaluation program every day...
Fishhawk
Fishhawk
If gold stabilzes at ANY price it would do what you say is feared, namely provide a stable investment vehicle, a perfect Store of Value!!!
If gold rises...well we know 'they' don't like that.
If gold falls, the Thais, the Indians, the Chinese and even a few Westerners will Hoover up the physical. Physical MUST flow for the paper market price to be legit.
So what to make of our present situation? Can't go up down or sideways....I remain very interested as this creates a situation in which something fundamental must change.
I have a hair trigger and panic at a moments notice so do not look to me for timing advice but I think this could be 'it'. I guess we could drift along at 1300 +/- 50 for a few months but then even that begins to look stable.
very interesting situation
the gold 'market' is FUBAR, wake me up when it's all over.
There is no government shutdown There are, however, a lot of people in govt terrified that you might discover you don't need them.