Mid-Day Gold & Silver Market Report – 10/17/2013
GOLD RISES ON PROMISE OF MORE GOVERNMENT SPENDING
The Gold price is up significantly Thursday as policymakers in Washington approved a debt ceiling arrangement that has ended the U.S. government shutdown. The last-minute deal raises the national debt ceiling and has allowed the government to avoid technical default on debt obligations. “In a nutshell, we are back to business as normal where the U.S. government spends way too much money; which we have to borrow on the global market,” H.C. Wainwright LLC managing director Jeffrey Wright said. “We have no realistic way to pay it back and even with a ‘shrinking’ rate of deficits, the situation is not sustainable.” With the promise of continued borrowing from global financiers, the highly anticipated reduction of the Federal Reserve’s quantitative easing (QE) measures will inevitably be postponed. “Gold is the natural vehicle to counterbalance this behavior and is going higher once again,” Wright added. Though many catalysts for the movement of Gold have been bearish in recent months, delaying a decrease in monetary easing and the chaotic dealings among officials in Washington could lend support to Precious Metals prices.
U.S. stocks are wavering during Thursday’s trading as early gains realized by the debt agreement in Washington were outweighed by poor corporate earnings data. Though the S&P 500 is inching back toward a new record high, concerns linger that the U.S. government shutdown hurt our growth and credibility. "There are no winners here — these last few weeks have inflicted completely unnecessary damage on our economy," President Barack Obama said. "We don't know yet the full scope of the damage, but every analyst out there believes it slowed our growth." Following the recent debacle in Washington, it seems unlikely that the Federal Reserve will begin scaling back its current level of asset purchases. The perpetuation of QE has been very positive for stocks in the past.
At 1 p.m. (ET), the APMEX Precious Metals spot prices were:
- Gold, $1,324.40, Up $40.00.
- Silver, $21.94, Up $0.55.
- Platinum, $1,435.40, Up $38.00.
- Palladium, $738.80, Up $24.20.
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