Tuesday, October 8, 2013

Focus on the Debt Ceiling Countdown, Not The Shutdown -- Peter Hug -- October 8, 2013

Kitco News speaks with Peter Hug to get his take on the instability going on in the U.S. It is day 8 of the U.S. government shutdown with no settlement between Republicans and Democrats in sight. "The government shutdown is psychologically in the market but it's so minor relative the bigger picture of the debt ceiling negotiations that are coming to a deadline within the next 10 days," Hug says. "If they blow this one, I can't even guess at what this does to the price of the metals. Obviously it's going to be higher, but I can't even quantify what's going to happen." Despite the approaching debt-ceiling limit, Hug says the fundamentals to this market look bearish. With regards to this month's FOMC meeting, Hug says Federal Reserve Chairman Ben Bernanke has the perfect out and the shutdown is giving the Fed ammunition to continue its bond-buying program. "My assumption is that this debt ceiling will get extended and it will not have an impact on the credit rating of the United States. If they blow it, I can't quantify what the results are going to be, but it's going to be really negative," Hug adds. Watch now to hear how Hug expects gold & silver to react to the debt ceiling debate results. Kitco News, October 8, 2013.