Gold Rises as US Shutdown Gets Underway

Gold rebounded after reaching an eight-week low in New York as investors weighed a U.S. government shutdown and the outlook for U.S. stimulus.
U.S. lawmakers still need to agree on raising the debt limit to avoid a default after Oct. 17, following the government’s first partial shutdown in 17 years. The shutdown began after House and Senate lawmakers failed to agree on a spending plan for the fiscal year that started yesterday.
Gold is set for the first annual drop in 13 years as some investors lost faith in the metal as a store of value. Holdings in gold-backed exchange-traded products slid 27 percent this year on speculation the Federal Reserve will slow debt purchases. While the Fed said last month it will delay reducing stimulus, economists surveyed by Bloomberg Sept. 18-19 expect the first step in cutting bond buying in December.

via Bloomberg

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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 has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. 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