An interesting article appeard on Mining.com this past weekend regarding the current government shutdown in the USA and the (potential) effect it will have on gold.
Here are some excerpts:
The partial government shutdown that began this week is not going to have a quick resolution. Both sides of the political aisle seem to be entrenched and unwilling to negotiate. It is political theater to be sure, but there are real world consequences and investment opportunities at hand…
…The Impact on Gold
In a counter-intuitive move, gold and silver prices have declined in the two weeks following the FED’s decision not to taper. Most analysts agreed that significant FED tapering was baked into the sharply lower prices for precious metals, yet the news of no tapering failed to generate a rebound.
Adding to the bizarre price movements lately, stocks advanced 1% and gold prices declined sharply the day after the government shutdown was announced. Investors somehow interpreted the news as bullish for stocks or perhaps it was simply sell the rumor, buy the news…
…Gold and silver prices are not yet accounting for all of the money printing and new debt that has been created since the financial crisis. This type of delay between monetary inflation and price inflation typically lasts 5 years, suggesting that we may begin to feel the impacts in early 2014. This is also the strongest seasonal period for precious metals when the largest gains are realized.
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