After a positive first two days of the week, gold and silver are both suffering a corrective pullback in the early morning hours of Wednesday. In a somewhat shocking turn of events, Democrats and Republicans were able to come together and form a finalized budget, a move that will see the US government avoid repeating a shutdown.
While this week is expected to be mostly quiet as far as economic data is concerned, next week’s FOMC policy meeting is quickly becoming the only thing on investors’ minds.
Shutdown Round 2…Avoided
In the early morning hours of Wednesday, major news outlets from around the United States were reporting on a finalized bipartisan agreement with regard to a government budget for this fiscal year. Thanks to the collaboration between Democrats and Republicans, the government shutdown we lived through a few months ago will not be repeated. Back when the temporary budget was accepted, many condemned its temporary nature simply because it meant that we ran the risk of repeating a shutdown only a few months down the road. While up until today it looked very much like we would be seeing another shutdown, lawmakers surprised everyone by setting aside their differences and coming to an agreement.
Even though the news of a budget agreement was unexpected and undoubtedly positive, markets did not react to it all that much. Now, US lawmakers have the fast-approaching debt ceiling to worry about as that temporary deal is set to run out soon as well.
China To Increase Economic Stimulus
In other news from around the world, it was reported that Chinese banks increased the amount of money they lent this past November. This news is being taken as a sign that Chinese officials are looking to continue to stimulate their economy, even though such a stimulus may see the large Asian nation flirt with widespread inflation.
As we look ahead to the end of the week, things are seeming like they will remain just as quiet as they were today. Investors are gearing up for the FOMC policy meeting which, at this point, is less than a week away.