Gold Market Gyrate on U.S. Government Shutdown Theatrics / Commodities / Gold & Silver 2023
Precious metals markets got hammered earlier this week asinterest rates continued their relentless march higher.
The 10-year Treasury note recorded its highest yieldsince 2007. Meanwhile, the average conventional 30-year mortgage rate surged to7.31% -- a level not seen since 2000.
Higher rates are putting pressure on housing andfinancial markets. They are also hitting consumers and small businesses. For now, though, the economy hasn’t enteredinto a recession – at least not officially.
But the Federal Reserve seems intent on keeping interestrates elevated until something breaks in the economy. Any incoming bad news will likely be goodnews for precious metals markets, which may now be entering oversold territory.
Investor interest in gold and silver has languished inrecent months as prices have failed to break out and remained mired in tradingranges. Of course, investors who are aiming to accumulate bullion shouldwelcome soft market conditions. They make for favorable buying opportunities.
This week’s selling did motivate a good number of bargainhunters to place orders for bullion. MoneyMetals saw increased activity from large precious metals purchasers inparticular.
It’s now a buyer’s market for gold and silver. In addition to reduced spot prices, premiumson coins, bars, and rounds have also trended down. In fact, they have reachedthe lowest levels since early 2020.
It is possible that spot prices could head lower still inthe days ahead. It’s also possible that a big Fall rally is just gettingunderway.
Investors who want to wait for bullion to get cheaperbefore buying risk never being able to buy because spot prices never becomecheap enough.
Buying and holding during a major bull market is thesurest way to profit from it. And the surest way to avoid regrets over purchaseprices is to buy in increments over time.
Investors can protect themselves from the risks of beingon the wrong side of up, down, or sideways markets by simply adding to theirpositions regularly, regardless of price.
This strategy is also known as dollar-cost averaging. AndMoney Metals’ Monthly Savings Plan makes it easy for bullion investors toimplement. Just Choose the monthly dollar amount you wish to invest, which canbe as little as $100, or the monthly number of ounces you want to buy.
By exchanging depreciating U.S. fiat currency for soundmoney regularly, you’ll have good odds of coming out ahead over time in termsof purchasing power.
Heading into the weekend, all eyes will be on Washington,D.C as the deadline for avoiding a potential government shutdown looms. Thepolitical melodrama may make for compelling headlines. But investors shouldn’tbe distracted by them.
Yes, some agencies could temporarily close their doors.Some federal workers may worry about getting their paychecks on time. But aftersome sort of bipartisan deal is inevitably reached, it will be back to businessas usual.
Government shutdowns and debt ceiling showdowns now occuron a regular basis. They grab headlines and motivate activists on both sides ofthe nation's political divide.
But they change nothing -- at least when it comes to thetrajectory of federal finances. Government spending doesn't get cut. Thedeficits don't shrink. The Treasury Department doesn’t default on bonds. Andthe Federal Reserve continues to print currency in excess.
It’s ultimately the monetary system that enablespoliticians to continue kicking the can down the road. And the consequences offiscal recklessness will ultimately be reflected in the continued decline ofthe Federal Reserve note’s purchasing power.
By Mike Gleason
Mike Gleason is President of Money Metals Exchange, the national precious metals company named 2015 "Dealer of the Year" in the United States by an independent global ratings group. A graduate of the University of Florida, Gleason is a seasoned business leader, investor, political strategist, and grassroots activist. Gleason has frequently appeared on national television networks such as CNN, FoxNews, and CNBC, and his writings have appeared in hundreds of publications such as the Wall Street Journal, Detroit News, Washington Times, and National Review.
© 2023 Mike Gleason - All Rights Reserved
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