BRIEF GOLD AND SILVER UPDATE (2:00 am EST)
The U.S. congressional battle over Obamacare and the raising of the debt ceiling is moving into the 11th hour with both Democrats and Republicans digging in their heels and refusing to compromise their positions. Our main concern here is how the financial markets are going to react to the final outcome. Gold and silver prices seem to be pausing this week and waiting to take their cue from this event. Both precious metals are remaining above support levels at $1300 in gold and $21 in silver with some short-term bullish momentum in the charts this week, but they need to rally now to fit the timing for an upside reversal by Friday (as described in Wednesday's blog). If the U.S. government shuts down, it could cause precious metal prices to break their supports and fall lower. Unfortunately (at least at the moment) it appears that this could happen, so we need to be prepared to bail out of our long positions, possibly as early as today (Friday). The deadline to fund the government is Monday night and Congress is planning to work through the weekend; nevertheless, we may get a feeling for what their decision will be on Friday (and gold and silver may not wait for Monday to make their decision). We are still holding our long positions in gold and silver but are prepared now to bail out if prices start to move lower and break support (especially on news of a government shutdown).
UPDATE (3:30 pm EST): The gridlock in Washington is continuing today with both sides (Republicans and Democrats) apparently showing no signs of compromising their positions. At the moment it appears that the Republican controlled House of Representatives could vote as early as tomorrow (Saturday) on whether or not to pass the Senate's emergency funding bill that does not defund Obamacare. Gold and silver prices were up a bit today and the charts were flashing a few new bullish technical indicators, so I am going to continue to hold my long positions in these metals today and wait to see if the gridlock in Congress can break before next Tuesday.
The U.S. congressional battle over Obamacare and the raising of the debt ceiling is moving into the 11th hour with both Democrats and Republicans digging in their heels and refusing to compromise their positions. Our main concern here is how the financial markets are going to react to the final outcome. Gold and silver prices seem to be pausing this week and waiting to take their cue from this event. Both precious metals are remaining above support levels at $1300 in gold and $21 in silver with some short-term bullish momentum in the charts this week, but they need to rally now to fit the timing for an upside reversal by Friday (as described in Wednesday's blog). If the U.S. government shuts down, it could cause precious metal prices to break their supports and fall lower. Unfortunately (at least at the moment) it appears that this could happen, so we need to be prepared to bail out of our long positions, possibly as early as today (Friday). The deadline to fund the government is Monday night and Congress is planning to work through the weekend; nevertheless, we may get a feeling for what their decision will be on Friday (and gold and silver may not wait for Monday to make their decision). We are still holding our long positions in gold and silver but are prepared now to bail out if prices start to move lower and break support (especially on news of a government shutdown).
UPDATE (3:30 pm EST): The gridlock in Washington is continuing today with both sides (Republicans and Democrats) apparently showing no signs of compromising their positions. At the moment it appears that the Republican controlled House of Representatives could vote as early as tomorrow (Saturday) on whether or not to pass the Senate's emergency funding bill that does not defund Obamacare. Gold and silver prices were up a bit today and the charts were flashing a few new bullish technical indicators, so I am going to continue to hold my long positions in these metals today and wait to see if the gridlock in Congress can break before next Tuesday.
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