A prolonged United States government
shutdown should be supportive for gold, said
HSBC in a research note.
According to HSBC, the standoff over a
continuing resolution to the budget is now in
its third day, and the impasse on Wednesday
undercut the dollar and supported gold.
HSBC’s foreign-exchange team says the
inability of the government to pursue pro-
growth policies going forward is a factor
working against the dollar.
The bank’s economists say that a government
shutdown lasting a week or longer increases
the risks to the economy, which may hurt
business and consumer confidence.
“That said, we believe bullion is likely to
benefit, given its historical status as a safe-
haven asset, should the shutdown be
prolonged,” HSBC concluded.
US crude oil prices remained weak on Thursday
amid higher than expected crude oil stock-piles,
and concerns that partial shutdown of the US
government may reduce the crude oil demand
from the world's largest economy. However,
slight positive data from Europe and China may
have limited further decline in the commodity
prices to some extent. WTI crude oil for
November delivery on NYMEX was seen trading
down by 0.24% at $103.88 per barrel as of
16.12 IST on Thursday.
India crude oil futures recorded a slight up-tick
on Thursday despite a weak trend on NYMEX.
However, technically, the trend in crude oil
futures for October delivery on India's Multi
Commodity Exchange (MCX) looks sideways to
bearish for the day and traders are advised to
take sell position.
Copper prices in the global market remained
weak on Thursday amid partial shutdown of
US government, weaker than expected
economic data from around the globe and
the US. However, hopes that US Federal
Reserve may continue with its existing
monetary stimulus program considering
partial shutdown of the US government and
weaker than expected economic data from
the United States and around the world may
have limited further decline in the base
metal prices to some extent.
Copper futures for December delivery on
Globex platform of Comex was seen trading
up by 0.030% per pound as of 15.12 IST
while copper on London Metal exchange
(LME) for delivery in three months was seen
trading down by 0.19% at $7284 per metric
ton as of 12.10 IST on Thursday.
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