Gold has risen today as many investors have been assessing the consequences of a lower dollar following the continued budget show down. So far congress has continued to disagree on the spending bill which is damaging the economy and delaying the release of key data figures.
Additionally, the looming October 17 deadline is becoming more and more impending, this is worrying many as October 17 marks the deadline to increase the borrowing limit.
Nevertheless, many are remaining hopeful that the current standoff will be settled by the deadline.
Interestingly the last debate over the U.S. debt ceiling in 2011, resulted in gold hitting its all-time high of $1,920 an ounce, with congress reaching an agreement at the very last minute.
What does this mean for gold?
Dollar devaluation is traditionally good news for gold and it would seem if congress do not meet in the middle before the debt ceiling deadline in ten days time a devaluation crisis may occur spelling good news for gold.
Therefore gold could well “double over night” as some say, as people begin to question the feds motives and staying power whilst losing confidence in the face of uncertainty of their government.