Government Shutdown Is Officially Here, But Gold Still Dropped $40
On Tuesday, gold (NYSEARCA:GLD) futures for December — the most active contract — fell $40.90 to close at $1,286.10 per ounce, while silver (NYSEARCA:SLV) futures dropped 53 cents to finish at $21.18.
Despite the U.S. Government starting a partial shutdown, gold closed near its lowest level in about two months. Congress, divided over Obamacare, was unable to pass a continuing resolution that would keep the government funded through the start of the new fiscal year. As a result, any agencies that needed appropriations are now without funding and can not legally operate, with the exception of those duties that are considered necessary to protect life and property.
President Obama wrote a letter to employees of the federal government on Tuesday, saying that he will do “everything in my power to get the House of Representatives to allow our Government to reopen as quickly as possible, and make sure you receive the pay that you have earned.”
Many Republicans strongly oppose any spending bill that funds Obamacare, a position they have reiterated during all votes over temporary funding measures. For their part, Senate Democrats have indicated that they are unwilling to hold that conference because they have been asking for months for a meeting to discuss the full-year budget, but will not do so while the government is shut down.
By the end of the trading day, shares of the SPDR Gold Trust (NYSEARCA:GLD) fell 2.8 percent, while the iShares Silver Trust (NYSEARCA:SLV) dropped 2.3 percent. Gold miners (NYSEARCA:GDX) Barrick Gold (NYSE:ABX) and Yamana Gold (NYSE:AUY) both sank more than 3 percent. Shares of Endeavour Silver (NYSE:EXK) declined 3 percent.
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Disclosure: Long EXK, AG, HL, PHYS