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The gold price was on the rise after the US government entered into a partial shutdown. The shutdown has since concluded.
Gold made gains amidst a potential US government shutdown, and continued to rally as the shutdown went into effect.
At midnight on Friday (January 19), the US government officially entered into a partial shutdown, as members of the Senate were unable to reach a deal to resume funding for federal operations.
News of the shutdown caused the US dollar to continue on its downward trajectory, trading near three-year lows, and allowed the price of gold to climb. This current period of uncertainty has the yellow metal being upheld as a safe-haven asset, which has only further increased its value.
While gold rose 0.2 percent to reach $1,332.45 an ounce over the weekend, Monday (January 23) showed a steadiness of price within the markets.
Jonathan Butler, an analyst at Mitsubishi, stated that “[g]old is supported at $1,330 for now. We could go a bit higher as this (U.S.) brinkmanship gets extended … but overall we may have seen the high watermark of the gold price in relation to the U.S. government shutdown issue.”
The price of gold has rallied around 26 percent since its December 2015 low of $1,051.10, and has held steady above $1,200 since early 2017.
Gold was not the only precious metal to experience an uptick prior to the government’s announcement. As of Friday afternoon, silver was also making gains on the back of a looming shutdown.
However, unlike its yellow counterpart, the grey metal did not continue to climb once the shutdown was officially declared. According to Reuters, silver was down 0.1 percent, at $16.99 an ounce, on Monday.
As of 2:20 p.m. EST on Monday, the Senate had ended the three-day shutdown, and at 2:42 p.m. EST the gold price was up 0.1 percent, trading at $1331.90.
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Securities Disclosure: I, Nicole Rashotte, hold no direct investment interest in any company mentioned in this article.
