The political impasse in Washington and wrangles over the U.S. debt ceiling, which is leading to a gradual shutdown of the US government, is yet to seriously rattle market sentiment, but the longer it carries on the greater the risk of extreme market volatility.
Gold cannot be printed or manufactured in contrast to the currency. That’s why over the long term it has kept its value as the ultimate currency. There can be no “gold war.” However, we often hear about a currency war.
The most important and interesting implications are seen when we look at the reaction of the precious metals to Thursday’s decline in USD Index. Specifically, it is the lack of reaction in these markets that is most striking.