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Gold is becalmed as US gives itself economic space

The gains in the gold price have calmed today after Washington reached a deal to extend the deadline on the Federal government’s debt ceiling, in conjunction with a stock market rally.

Gold reached a peak of $1,340.56 yesterday, before dropping to a low of $1,322.92. Today shows a marked improvement, with a rise up to $1,338.04.

Yesterday we discussed how the gold price could be more heavily influenced by domestic issues in Washington than geopolitical tensions in North Korea, and today’s revelations suggest US economic policy has put a notable dent in gold’s rally.

US president Donald Trump met with congressional leaders and agreed upon extending the US’ debt limit and government funding to December 15, in addition to securing relief for victims of Hurricane Harvey.

The meeting comprised of Trump, Senate Minority leader Chuck Schumer of New York, Senate Majority leader Mitch McConnell, House Minority leader Nancy Pelosi of California and House speaker Paul Ryan.

The decision comes in good time, as on September 30 government funding expires, a situation which if left unresolved, would result in a partial government shutdown. Treasury secretary, Steven Mnuchin, had urged Congress to raise the borrowing limit by September 29 to avoid default.

With more breathing space for a functional government, the dollar and stock markets look set to recover, which does not bode well for gold. The commodities team under Jeffrey Currie at Goldman Sachs suggested that “real rates and the US Dollar, explain 85% of the price movement”.

In mining news Canada’s Gran Colombia Gold announced yesterday on their website that they have resumed operations in at its Segovia mine complex in the historic gold district of Antioquia, Colombia. Operations had been suspended owing to 42-day mining strike, which saw curfews imposed as violence ensued.

Photo credit: bauhaus1000

Link to this article: : http://www.goldmadesimplenews.com/gold/gold-is-becalmed-as-us-gives-itself-economic-space-13387/

Posted by on Sep 7 2017. Filed under Gold News, Mining. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.

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