Closing Gold & Silver Market Report – 10/1/2013
GOVERNMENT CLOSURE FAILS TO IMPACT MARKETS
The downward pressure on Precious Metals remains as the U.S. government shutdown failed to rally Gold’s safe haven appeal, and deflationary concerns currently outweigh the fear of inflation among economists. Major sell-offs in exchange traded funds (EFTs) forced the Gold price down today as most analysts and investors remain confident that the government shutdown in Washington will be short-lived. “While the standoff is not a great thing, the effects seem to be limited, and we are not seeing investors rush to Gold for its safe-haven quality,” Frank Lesh, a trader at FuturePath Trading, said. “Riskier assets like equities seem to be in favor.” Today’s ETF sell-off pushed the yellow metal to its lowest level in seven weeks as investor sentiment currently remains optimistic that the government closure will put pressure on political officials to reach a swift agreement regarding U.S. spending policy.
The cessation of government activity has failed to have any significant impact on equities markets today as the S&P 500 rebounded from yesterday’s three-week low. “We have gone through this before, it’s not too surprising that investors aren’t frightened by it,” Bruce Bittles, chief investment strategist at RW Baird & Co., said. “The selling pressure lifted, and that has encouraged a lot of buyers here looking into buying the dip.” The news that could have more impact is discussion surrounding the U.S. borrowing limit which is set to be exhausted by mid-October. Markets could react far more negatively if the quarrel over the U.S. debt ceiling is not reached in a reasonable amount of time.
At 5:20 p.m. (ET), the APMEX Precious Metals spot prices were:
- Gold, $1,289.60, Down $39.40.
- Silver, $21.20, Down $0.54.
- Platinum, $1,383.10, Down $27.80.
- Palladium, $718.80, Down $8.40.