Unless you have been living under a rock recently, odds are pretty good that you have heard plenty about the US government shutdown. The shutdown, which is now in its 4th day, has a firm stranglehold on this week’s news.
Though a complete and total government shutdown sounds a bit terrifying to some, the reality is that it is only a partial shutdown. Officially, only non-essential government entities are being forced to close, this includes National Parks, monuments, and certain agencies. Those parts of the government which have been determined to be absolutely vital have been retained and will be throughout the duration of the shutdown, however long that might be. The interesting part of this whole shutdown is that the highest paid government employees are still receiving their paychecks, while some of the lowest paid employees have been ushered out of work until this shutdown ends. With such ample time to prepare, it is absolutely mind-boggling that the US government is forcing this shutdown upon itself.
In terms of gold and silver, the original school of thought was one that assumed a government shutdown would see gold and silver take on their roles as safe-haven assets. When the shutdown ensued, however, precious metals reacted quite differently by declining in value almost immediately. This is not surprising as almost every market took a hit in the immediate aftermath of the shutdown. The world economic atmosphere is showing signs of worry and if the world economy is thrown into a panic there is no saying what the fate of precious metals will be.
As of now, the retained Quantitative Easing initiative is working in gold and silver’s collective favor as an underlying bullish factor for the metals. As market become increasingly volatile due to this shutdown, more and more people will begin to look at precious metals as a way of protecting their assets. Keep your eyes and ears posted on the news this weekend because even though the work week is over, there is still a chance we might hear of some developments regarding this shutdown.