Gold has taken a few hits this week due mostly to the activity in Washington DC. Law makers seem to be coming closer to a deal, which has pushed gold prices down. Friday of this week saw a big sell order which may have also sparked a decline in prices. Here is a look at a few of the factors this week which have weighed heavy on gold.
18 House Republicans met with President Obama Thursday night to begin talks about the debt ceiling and government shutdown. The current offer on the table is that the Republicans will vote to raise the debt ceiling for a short term 6 week period to give each side time to negotiate. The President is open to this, so long as Republicans vote to reopen the government. Nothing is set in stone yet, but all the reports from Washington say that meetings have been “constructive” and that both sides are “flexible”.
What does this mean for gold? Traditionally, political and social turmoil creates an opportune time to buy gold. It causes investors to seek safe haven investments like the precious metals. When signs are shown that tension is being alleviated, like the talks that happened Thursday night and ones happening today, then investors have a different mindset. It becomes preferred to take money out of safe havens and invest back into the stock market. Case in point – in the past two days the Dow jumped over 300 points and gold has lost close to $30 per ounce.
The Big Sell Order
Friday morning saw a dip of over $20 per ounce on gold. A large sell order came through in the futures market which temporarily created a stop in trading for 10 seconds. Many experts believe that this one sell-off of 5,000 gold futures contracts caused the gold price to dip. Silver and even oil prices were affected by this shift.
Fantastic Buying Opportunity
There’s no hiding it. Gold is at a three-month low and if you have been waiting for a lull in prices before jumping back into gold – now may be your time to buy gold. Contact American Bullion today with any of your questions. Our precious metals experts can help educate you about precious metals and find a solution that works for you. Remember, you can roll over or transfer any portion of your existing IRA or old 401k from a previous employer into a precious metals IRA. The rollover is tax-free and hassle-free. Contact one of our precious metals experts today at 1-800-326-9598.