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(Kitco News) –
Gold prices continued their recent declines after the U.S. Congress struck a 45-day deal over the weekend which narrowly averted the Federal government shutdown that was set to begin on Monday.
Major stock indices were up in premarket trading and kicked off the first trading session of October with positive momentum, but have since pulled back, with the S&P 500 and Dow Jones now virtually flat on the session.
Traders appear to have regained their risk appetite, however, as the NASDAQ is up over 100 points at 13,322 and Bitcoin hit $28,950, its highest level since mid-August. Meanwhile, the yield on the benchmark 10-year treasury jumped to 4.672%, its highest level since July 2007.
None of this was good for precious metals prices. Gold and silver have both fallen to their lowest levels since early March, with spot gold last trading at $1,833.20, down 0.85% on the session, and COMEX silver futures down 4.4% at $21.445 per ounce at the time of writing.
Yung-Yu Ma, chief investment officer at BMO Wealth Management, told Bloomberg that he expects this market optimism to be a short-term phenomenon.
“Financial markets were bracing for a shutdown, so there’s an element of relief, but it’s only a temporary lifting of one of the clouds hanging over the markets now,” he said. “Interest rates and Fed hawkishness remain the name of the game and the main driver of the markets over the next few weeks.”
Peter Schiff believes gold’s down days are also numbered, as the macro picture will soon weigh on equities and boost the precious metal.
#Gold is down again as clueless traders cling to the false narrative that rising bond yields are bearish. In contrast, they ensure not only a hard landing, but a financial crisis, skyrocketing federal budget deficits, soaring unemployment, and massive QE. #Inflation is bullish!
— Peter Schiff (@PeterSchiff) October 2, 2023
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