Gold and silver took some hefty hits this week, thanks to a government shutdown which started on Tuesday and is still going on today. With the US government unable to figure out the budget for this governmental year, there is no saying when the shutdown will cease.
For those of you that are unaware, the government shutdown is really only a partial one. Officially, only non-essential government agencies, bureaus, and departments will be forced to close, while those positions and departments which are seen as essential are going to continue operating as normal. This situation has given rise to a scenario which sees the government’s lowest paid employees being forced to live with no pay while the highest paid members of the government retain their paycheck and work hours. For obvious reasons, this has caused some ire amongst an American public who has already been getting a bit tired of their government in recent weeks and months.
In the past, government shutdowns have tended to be short in duration and most often are resolved within a day or two. This shutdown, which started on Tuesday, is going to be 4 full days by the end of Friday with no real end in sight.
Now that you have some background on the shutdown itself, you may be wondering what any of this has to do with precious metals. The reality is that the whole world is paying attention to this news story, and the world economic marketplace is growing in anxiety. This investor anxiety has seen most markets take dips directly downward; gold and silver were not able to avoid these declines in value. On Monday alone, gold lost over 20 dollars while silver lost about 30 cents. The rest of the week saw both metals decline a bit further, and from then on out make small alterations up and down.
Gold and silver were not helped by the fact that economic data provided by the government has been suspended as well due to the shutdown. There is no saying when the reports, which included September’s employment report, will be released as there is really no way of saying when the government shutdown will conclude. Over the weekend it will be important to pay attention to the news as a breakthrough in this debacle can happen at anytime.
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