Column: China’s commodity import trend driven by prices, not economy
China's imports of major commodities are often viewed through the prism of the performance of, and outlook for, the world's second-biggest economy.
Spot gold fell to $1,328/oz Monday, but the precious metal had climbed back to $1,336.70 by 3:00 am EST Tuesday, just hours after the US government shutdown began.
Absolutely everything you need to know about how the shutdown will work
The shutdown, which hasn’t yet sent investors fleeing en masse to safe havens like gold, coincides with the start of China’s national ‘Golden Week’ holiday. A massive chunk of Asian demand will therefore be absent from the bullion marketplace from October 1 – 7.
While today’s budget deadline in Washington to fund government services has very serious implications, the more crucial moment for the US and global economy is October 17, when the United States government must meet its annual debt obligations.
Kitco’s technical analysis sees gold in a short-term holding pattern, and if gold is going to break out, it will likely happen closer to the October 17 deadline, in response to this current atmosphere of political brinkmanship.
The Republicans in the US House of Representatives, by demanding a delay of the Affordable Care Act before agreeing to fund government spending increases, are playing a risky game. The GOP is increasingly perceived as the party responsible for an impasse that could threaten US economic recovery.
(Photo credit: Deseret News)
A partial transcript of President Obama’s remarks on Monday, on the looming government shutdown:
I also want to be very clear about what would change. Office buildings would close. Paychecks would be delayed. Vital services that seniors and veterans, women and children, businesses and our economy depend on would be hamstrung. Business owners would see delays in raising capital, seeking infrastructure permits or rebuilding after Hurricane Sandy.
Veterans, who’ve sacrificed for their country, will find their support centers unstaffed.
Tourists will find every one of America’s national parks and monuments, from Yosemite to the Smithsonian to the Statue of Liberty, immediately closed. And of course the communities and small business that rely on these national treasures for their livelihoods will be out of customers and out of luck.
And in keeping with the broad ramifications of a shutdown, I think it’s important that everybody understands the federal government is America’s largest employer. More than 2 million civilian workers and 1.4 million active duty military serve in all 50 states and all around the world.
In the event of a government shutdown, hundreds of thousands of these dedicated public servants who stay on the job will do so without pay. And several hundred thousand more will be immediately and indefinitely furloughed without pay. What, of course, will not be furloughed are the bills that they have to pay: their mortgages, their tuition payments, their car notes. These Americans are our neighbors. Their kids go to our schools. They worship where we do. They serve their country with pride. They are the customers of every business in this country. And they would be hurt greatly, and as a consequence all of us will be hurt greatly, should Congress choose to shut the people’s government down.
So a shutdown will have a very real economic impact on real people, right away. Past — past shutdowns have disrupted the economy significantly. This one would too. It would throw a wrench into the gears of our economy at a time when those gears have gained some traction.
