As of midnight Friday night, the US Government is officially shut down... again. Mind you, if the senate would have come to a compromise, the deal would have only lasted until next month and the whole fiasco would have started all over again.
The USA is broke, simple as that.
This does not bode well for the dollar, the reserve currency of the world. Confidence is the only thing holding up the dollar and this shut down is sure to affect the dollar in coming days and weeks. I fully expect the dollar to go down a notch or two.
Inversely, I expect gold to go up for the rest of the month and all through February. Not to mention the fact that the Chinese launched their Petro Yuan the day before, on Thursday and you have to admit, that is excellent timing. They will now buy oil from Iran and Russia in exchange for Yuan which will then be convertible to gold on the Shanghai Exchange, unlike the dollar which cannot be converted to gold, except on the open market.
Also, the Chinese Lunar New Year starts on February 18 this year so expect lots of activity in the gold sector since the Chinese love to buy gold up to and during this period.
So then, over the next 6 weeks, expect the dollar to go down and gold to go up, possibly to $1,400 an ounce, maybe even higher but $1,400 is a good guesstimate. This should be very positive for the miners.
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