After a dismal April-to-June period, the gold price notched its first quarterly gain in a year during the third quarter that ended last Monday. However, the start of the fourth quarter on Tuesday ushered in one of the worst sell-offs in months. Amid more calls of market manipulation, this came just as the U.S. government began a shutdown that is now in its sixth day and quickly transitioning into a debt ceiling debate and potential crisis.
Despite the turmoil in Washington, American investors continue to shun precious metals based on recent ETF outflows and slowing coin sales.
In China, buyers were notably absent last week but will return from a national holiday on Tuesday and the gold market in India remains as confused as ever, though central banks around the world still hold the metal in very high regard, surprisingly, even here in the U.S.
Precious metals were lent some support by further declines in the U.S. dollar and the greenback could continue to fall given that Federal Reserve officials now seem inclined to taper their massive money printing effort later, rather than sooner. So far, inflation remains a “non-threat” and a decidedly negative factor for precious metals, however, that could change very quickly based on the latest trends in inflation expectations.
For the week, the gold price dropped 2.1 percent, from $1,336.20 an ounce to $1,311.20, and silver fell four cents to $21.74 an ounce…
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