Silver Prices Shave 3% Today on Debt Ceiling Hopes
NEW YORK (Oct 11) The government shutdown drags into a new day and the prospect of a U.S. default edges closer. There is hope, though. Yesterday, Republicans said they would offer a temporary increase to the debt ceiling in return for talks on budget and deficit issues. President Obama seems open to the idea, but wants Congress to end the government shutdown as well.
It’s unclear if Republicans are willing to capitulate on both issues. They have made a stand on the government shutdown and will want something in return before allowing the government shutdown to be lifted.
All this hope is pushing silver prices drastically lower. Silver prices are down more than 3% this morning at $21.21/oz. The more good news out of Washington, the worse precious metals are getting hit. There’s no deal yet between Republicans or Democrats, but investors believe one is coming soon. We’ll see how these negotiations fare over the next few days.
The rally in stocks may be short lived, though. The deal being pitched by Republicans has always been seen as the most likely deal, even before the shutdown. The deal would be for an extension until November 22. The November 22 date would also be a hard date. Republicans don’t want the Treasury to be able to use their powers to extend the debt ceiling.
Basically, there could be a six week reprieve for Congress to solve issues they haven’t been able to solve since Obama became President. It’ll be interesting to see how this plays out.
In the meantime, silver and gold will continue to whipsaw back and forth depending on what Congressional leaders say day to day. If next week comes and there isn’t a deal, expect investors to be really nervous.