Increased Market Volatility Ahead Of Budget Crisis
Congress has ten legislative days to draft a budget. If there is an agreement, we will only have to wait until December for things to become interesting again, according to Treasury Secretary Jack Lew.
Stocks depend on what happens over the coming months. It seems we could have another budget crisis if Democrats and Republicans can’t agree. Markets will respond to this. Markets will remain uncertain and volatile. China has put $250 billion into saving their market and its probably not over, even though its rulers say otherwise: ”We let you have your play time, now it’s time for the grownups to take over.”
Gold futures closed with a small decline with investors turning their attention to an increase in the US stock market. The Federal Reserve will meet next week, but they won’t raise rates.
“The global decline of commodities and steady appreciation of the [U.S. dollar] continues to add pressure on this precious metal. If data from the United States this week is robust, then more pressure may be experienced for gold which may trigger a selloff to the next relevant support at $1,110 [an ounce],” said Lukman Otunuga, research analyst at FXTM in a Tuesday note.
On Friday, the contract shaved off $3.10 after the monthly U.S. nonfarm payrolls report offered a mixed picture of the health of the country’s labor market.
“The major catalyst for a potential heavy selloff in gold continues [to] revolve around whether the Federal Reserve begins to raise U.S. interest rates this year,” Otunuga said.