Gold Tests Resistance As Government Shutdown Drags On - Gainesville Coins News
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Gold Tests Resistance As Government Shutdown Drags On

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Gold Tests Resistance As Government Shutdown Drags On

Markets were subdued on Monday as the partial government shutdown in the U.S. enters its third day.

From a technical perspective, gold has been failing at resistance with no clear tailwinds for a move higher.

Spot gold still managed to climb into positive territory early this morning. The yellow metal was steady around $1,332/oz.

Meanwhile, platinum continued to rise, adding $3 (+0.3%) to $1,013/oz. This is close to its highest since early September.

The silver price traded flat at $17 an ounce while palladium slumped 1.1% (-$12) to $1,084/oz.

Stocks on Wall St were barely lower at the opening bell as traders are mostly staying on the sidelines until the government shutdown is resolved.

Nonetheless, Americans remain exceptionally bullish about the stock market. One reason cited for the optimism is lower taxes.

In fact, the International Monetary Fund (IMF) revised its projection for global growth higher due to President Trump's tax cuts.

Wall St takes a break

The bond market likewise showed no strong reaction to the tens of thousands of public employees being furloughed by the government shutdown. The 10-year T-note yield held near 2.64%.

The last such shutdown occurred in 2013 during the Obama administration. Unlike the last instance, not all state-run memorials and national parks will be closed this time. For instance, the Statue of Liberty will reopen to visitors.

One possible impact of the stalemate in Washington could be a delay in the release of economic data. Fourth-quarter GDP was due to be reported this week.

The U.S. dollar was down 0.1% on the DXY index this morning, falling below 90.5. The yen and euro were steady while the British pound hit a new 19-month high at $1.39 on news of a Brexit bill being considered in Parliament.

Equities rose in Asia and Europe on Monday. Emerging market stocks posted their longest streak of gains in six months. Several regional stock indices around the globe are trading at record highs.

Crude oil pared earlier gains on the announcement that Russia and OPEC will leave their production cuts in place for the time being.

However, U.S. companies—including shale producers—are being cautious with new spending after their optimism backfired during previous surges in crude prices.

Looking ahead, more corporate earnings will be reported this week. Several central banks will also make policy decisions: the Bank of Japan meets on Tuesday and the European Central Bank holds its next meeting on Thursday.

The yearly gathering of the financial elite in Davos, Switzerland will also carry on in the background this week.

 

The opinions and forecasts herein are provided solely for informational purposes, and should not be used or construed as an offer, solicitation, or recommendation to buy or sell any product.

About the Author

Everett Millman

Everett Millman

Analyst, Commodities and Finance
Managing Editor

Everett has been the head content writer and market analyst at Gainesville Coins since 2013. He has a background in History and is deeply interested in how gold and silver have historically fit into the financial system.

In addition to blogging, Everett's work has been featured in CoinWeek, Advisor Perspectives, Wealth Management, Activist Post, and has been referenced by the Washington Post.

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