RE:Dif blogGovt Shutdown historically has been a non-event under a Republican President. There are 4 times under democrats where it lasted over 2 weeks each. Twice under Carter, once under Clinton (longest) and once under Obama. When there is a Republican President usually the majority of other shutdowns lasted 1 to 2 days at best. The Republicans control all three sides of Govt right now. They will look terribly stupid if this shutdown lasts more than a couple of days.
If you are looking for real reasons Gold goes higher the list is below:
- BTC continues to head lower as well as other cryptos. (Gold gets more attention)
- 10 Year Interest Rate will break 2.60% (Higher rates believe it or not is a reflection of the bond bear beginning which is a reflection of the world's distate for holding dollars)
- Dollar declining and breaking head and shoulders support (fiscal deficit will be over $500 billion larger than last year) Think of the dollar as the common stock of govt.
- Fed Reserve will pull out about $400 billion in liquidiuty by suspending their roll over bond buying (liquidity dries up and Fed will not buy escalating gov debt until it has too. This lack of buying demand equates to a falling dollar)
- Italy may drop out of Euro is 45 days. (Gold is flight to safety)
- Rising Bond yields trigger a sell off in equities (flight to safety in Gold)
- Gold mining production and discovery has flattened out and in some places are declining
- Look at a chart of interest rate hikes since the beginning of this tightening cycle. Each time we hike the gold price goes higher. Hike baby hike.
- Eventual launch of Petro-Yuan. Less demand for dollars. Expect China to let go of it some odd 3.1 trillion dollars.
- Real Interest rates are way above nominal interest rates and is gaining additional steam. Inflation which is not accuratley accounted for is much higher than actual US interest rates. Makes Gold look very attractive right now.
- Historically speaking Jan and Feb are the best months for appreciation of the yellow metal.
I think the 2.7 billion notional that was dumped was just technical trading against resistance at a certain price. The market absorbed it well. We should consolidate for a few more days as we will bounce of our upward trendline and/or support or both. After the consolidation we make a run at $1,350. I believe we eventually will break it in the next couple of weeks. When that happens we should sail thu $1,400 for the reasons mentioned above. One or 2 of those reasons should really assert it self at that time.