Yesterday, when the US govt went into shutdown ... I thought...

Yesterday, when the US govt went into shutdown ... I thought gold would rise in response. Admittedly, there are off-setting factors: a shutdown means slower US growth which might mean lower commodity prices; equally, the debt cap holding rather being raised might mean more constraint and monetary responsibility from the US (and less flight to gold). But overall, I was pretty sure the dominant effect would be that of increased govt risk and a devalued US dollar ... and gold playing its traditional role of hedge against risk ... and the gold price should rise.

Instead, it dropped $40 - which really surprised me. Apparently, what actually caused that drop is ... someone dropped a $10 billion sell order on gold that triggered the gold sell-down yesterday morning (perchance some really big institution with a big exposure, wanting to set the direction for the day???).

Anyway, whatever the cause ... it didn't hold ... and the fundamentals are ruling today ... gold is correcting ... up over $30 as I write ... and heading in the direction I would have expected in response to a US govt shutdown.

World makes just a little bit more sense tonight :)