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.

Bret Kenwell currently writes, blogs and also contributes to Robert Weinstein's Weekly Options Newsletter. Focuses on short-to-intermediate-term trading opportunities that can be exposed via options. He prefers to use debit trades on momentum setups and credit trades on support/resistance setups. He also focuses on building long-term wealth by searching for consistent, quality dividend paying companies and long-term growth companies. He considers himself the surfer, not the wave, in relation to the market and himself. He has no allegiance to either the bull side or the bear side.

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