US Gov Shutdown and SP500 dangerously close to red-line

We’ve all seen US shutdowns before, but this one has definitely crept up on us. In just a few days time, the US Government will be operating in a partial shutdown scenario, as it struggles to get its budget organised in time.

Government shutdowns involve the partial stoppage of some services, some people not getting paid and also the stopping of some vital information being passed back into the economy. Here’s a few things that could see disruption.

 – Food aid for millions would be disrupted 

 – IPOs for new companies would be disrupted

 – Economic data flow would be cut off

 – Travel (airports and other immigration services) would be slowed

 – If you’re a Federal employee, you probably won’t be paid

And that is just the tip of the iceberg. With Oil prices already high and a fragile SP500 that just needs a little bad news to fall through its 200MDA – the next week or two is looking dangerous for sharemarkets, especially in the US.

If you were ever looking for any additional reasons to move and balance your investment portfolio with precious metals, now could be the perfect time. While the administration of the largest economy on the planet sorts out its paperwork and secures even more debt to finance its operations, Gold and Silver will be quietly sitting on the sidelines ready to absorb any investment movement out from the sharemarkets.

With leading politicians arguing that continued massive debt issuance to fund Government services is what has caused the situation that we are currently in, this current lockdown could well carry on for quite a while, with some economists suggesting this could be the longest shutdown ever. The longest shutdown the US has experienced so far was during 2018-19 during the Trump administration (Mexican border expansion).  Resultant from that shutdown, Gold jumped from $US1246 to $US1345. 

You’ll find today’s technical analysis and charting below for your reference. 

Gold, with 200MDA

Silver, with 200MDA

SP500, with 200MDA

Gold Futures Technical Analysis

Gold Futures Monthly analysis continues to recommend a BUY with Weekly analysis a STRONG SELL signal.

Technical indicators – Monthly Projections

Summary for Monthly forecast: BUY

Disclaimer 

This news and any links provided are for general information only and should not be taken as constituting professional advice from Jaggards. Jaggards is not a financial adviser. We recommend you seek independent financial advice before making any financial decisions based on the information contained in this article.