With the federal government shutdown, partisan bickering showing no signs of slowing, and the debt ceiling just around the corner, the week started with gold and silver taking a step higher. The SPDR Gold Trust (GLD) was higher by 1% and the iShares Silver Trust (SLV) was up nearly 3%. Miners followed the trend, seeing Barrick Gold (ABX) climb 1.4%, Newmont Mining (NEM) was up 1.4%, and First Majestic Silver (AG) was up 1.6%. Despite the bump, prices declined on Tuesday, demonstrating that up or down, precious metals are likely to see increased volatility.
GLD data by YCharts
In the video below, I discuss why precious metals are likely to trend higher until the debt ceiling issue has been resolved, and why, if the debt ceiling is not raised before a default, we are likely to see a significant spike in the prices of both commodities.