Gold Prices Climb In Asian Trading As U.S. Government Ends Shutdown
(Kitco News) - Gold saw gains shortly after Asian markets opened on Tuesday as the U.S. dollar index returned to trading near three-year lows after Congress approved a short-term funding bill, ending the U.S. government shutdown.
“Gold edged higher in early trade [and] Asian equities open higher,” said MKS PAMP Group trader Jason Cerisola. “Following a headline that the US government will reopen, the yellow metal gapped lower sub 1330 but resting bids supported the market and the metal recouped the 1330 level.”
Investor appetite for precious metals, especially for gold, remained strong, said Daniel Hynes, senior commodity strategist at ANZ.
Aside from some political turbulence over the weekend, a strong week in equities was raising “concerns about stretched valuations, which are also pushing some investors into the gold sector,” Hynes added.
On Monday, the U.S. President Donald Trump signed the funding bill, which ended the three-day government shutdown and extended the funding through February 8, giving Democrats and Republicans additional time to come to an agreement on immigration reform.
“The three-week continuing resolution (CR) effectively returns the government to normal operations after nonessential personnel were furloughed today and other services were temporarily halted,” said analysts at Nomura said in a note on Monday.
“However, significant work needs to be done to strike a longer-term deal and avoid a repeat shutdown when the new CR expires after 8 February,” they added.