[video] Quick Take: Gold Will Gain From Long Shutdown
NEW YORK (TheStreet) -- After falling lower on Tuesday following the announcement of the government shutdown, gold bounced back on Wednesday.
<p/>Mike McGlone, research director for ETF Securities, told <I>TheStreet's</I> Joe Deaux that investors should forget about the short-term price action and focus on the bigger picture, which is the seemingly uncontrollable rise of our nation's debt.
<p/>He pointed out that during the last government shutdown in the mid-1990s, the debt-to-GDP level was about 65%. Now, it's at 100%.
<p/>Gold should continue to recover in the fourth quarter, especially if the employment data continue to remain mediocre, according to McGlone.<p/>Should gold prices continue to work their way lower, the massive buying of physical gold should return, with very solid support near $1,200. <p/>He added the U.S. government needs to raise the debt ceiling again. Assuming that happens, it should pave the way for higher gold prices, which has a positive correlation to the nation's rising debt. <p/> Also, it isn't just the U.S., but much of the Western world that has debt issues, which aids in not only higher gold prices, but all precious metal prices. <p/>While admitting that he doesn't focus on the short-term price levels that much, McGlone concluded that the yellow metal should have decent support near $1,300 an ounce and resistance near $1,400 an ounce. -- Written by Bret Kenwell in Petoskey, Mich. Follow @BretKenwell
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV