US Government Shutdown Fears Could Spur Gold Rally

The chances of a partial government shutdown in the week ahead appear to have fallen substantially with the announced resignation of House Speaker John Boehner. But if a deal does not get done, look for a speedy rally in gold, says trader Phillip Streible.

“If we do have a shutdown … the gold bugs are going to come out to work here,” the senior market strategist at RJO Futures said Friday on CNBC’s “Trading Nation.”

Streible reasons that some will think a partial shutdown is a sign to get into safe-haven assets, a group that gold arguably belongs to.

After all, when a shutdown occurs, “people go without paychecks, uncertainty is risen, and everybody gets a little less confident in the federal government—no matter how unconfident they may have started out,” Max Wolff of Manhattan Venture Partners said Friday.

via CNBC

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza