Precious Metals Break Losing Streak as Government Faces Shutdown and Debt Ceiling
On Wednesday, gold (NYSEARCA:GLD) futures for December — the most active contract — jumped $19.90 to close at $1,336.20 per ounce, while silver (NYSEARCA:SLV) futures gained 30 cents to finish at $21.89. It was the first time in four trading sessions that gold and silver closed higher.
Both precious metals received buying support as the U.S. Government continued to bicker about the looming debt ceiling and budget showdown. Republicans in the House of Representatives recently pushed through a stopgap bill by a party-line vote of 230 to 189 that would fund the federal government for the upcoming fiscal year if discretionary spending for the Affordable Care Act is eliminated.
Both President Obama and Democrats in the Senate, where the party has a majority, have made clear that legislation would not progress any further than the House of Representatives, which makes a government shutdown possible. Without that resolution, significant parts of the federal government could shut down on October 1 and within several weeks, the United States could default on its federal debt.