Gold futures ran out of gas and finished with small losses Tuesday after the U.S. Senate passed a temporary funding package last night aimed at ending the record-long government shutdown; reopening the government now depends on the House, which plans to convene in Washington tomorrow.
The consensus opinion among precious metals investors is that a reopened government and a resumption of economic data reports likely will reveal a weakening economy mean improved odds that the Federal Reserve will cut interest rates again in December.
“Traders believe [data] will show some weakening economic numbers and that would prompt the Fed to cut interest rates in December… that is probably encouraging the gold and silver market bulls today,” Kitco senior analyst Jim Wyckoff said in a note.
Meanwhile, President Trump’s tariff-related statements, including a suggestion to use tariff revenue to fund payments of at least $2,000 to most Americans, added another layer of uncertainty to global markets.
Silver futures have outgained gold in recent days, and while the potential end to the government shutdown is a factor, investment flows continue to support higher prices, Tom Pawlicki of StoneX said in a note.
A reopened government means resumed industrial projects, many of which require silver, but it also may lead to data releases that show a slowing economy, likely stoking safe-haven demand for silver and gold alike, Pawlicki said.
Front-month Comex gold (XAUUSD:CUR) for November delivery ended -0.1% to $4,106.80/oz, but front-month Comex November silver (XAGUSD:CUR) closed +0.9% to $50.618/oz for a third consecutive increase and fourth-highest settlement in history.
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