I have recently been suggesting to those that like to follow on Twitter and Facebook that I felt that recent events in the US which culminated* in last week's debt ceiling deal were almost bound to be good for gold investors. Like having a two-headed coin, in fact.
On the one hand, non-resolution and a default on US debt should have proved positive for gold as investors would flee to its safe haven status.
On the other hand, an increase in the debt ceiling should have proved positive for gold as:
a) the possibility of QE being reduced would reduce;
b) the dollar would most likely be hit; and
c) history suggests that the greater the total US debt, the higher the gold price.
And so, after this week's last-minute deal, came a 3% rising ray of sunshine in the precious metals' markets. Long may it continue.
* From what I can see, the deal struck does not seem to do anything more than delay the day of reckoning until early 2014.
Sunday October 20, 2013 by