On Thursday, gold (NYSEARCA:GLD) futures for December — the most active contract — declined $3.10 to close at $1,317.60 per ounce, while silver (NYSEARCA:SLV) futures edged 11 cents lower to finish at $21.79.
Both precious metals were relatively quiet as the U.S. government remained in partial shutdown mode for the third consecutive day. At the beginning of October, hundreds of thousands of federal employees were placed on furlough, while everything from national parks to numerous agencies and public services closed until some type of a budget agreement is reached by Congress.
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Speaking at a construction company in Maryland, President Obama placed the blame directly on Speaker of the House John Boehner (R-Ohio). “The only thing preventing people from going back to work and basic research starting back up and farmers and small business owners getting their loans, the only thing that is preventing all that from happening right now, today, in the next five minutes, is that Speaker John Boehner won’t even let the bill get a yes or no vote because he doesn’t want to anger the extremists in his party,” Obama said.
The total cost of the shutdown is difficult to quantify. Estimates range anywhere from $40 million to $300 million per day, depending on what is included in the calculation. Approximately 800,000 workers have been furloughed, and the the scope of the impact is systemic: lost labor means lost income, lost income means reduced spending, and reduced spending slows down the entire economic engine.
By the end of the trading day, shares of the SPDR Gold Trust (NYSEARCA:GLD) managed to finish slightly in the green, while the iShares Silver Trust (NYSEARCA:SLV) closed flat. Gold miners (NYSEARCA:GDX) Newmont Mining (NYSE:NEM) and Yamana Gold (NYSE:AUY) both dropped more than 2 percent. Shares of Hecla Mining (NYSE:HL), one of the largest silver producers in the country, gained 0.3 percent.
Year-to-date, the SPDR Gold Trust has plunged more than 20 percent, while shares of the iShares Silver Trust have dropped almost 30 percent.
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Disclosure: Long EXK, AG, HL, PHYS