goldmoney.com / By The GoldMoney News Desk / 2012-DEC-31
The future of the US economy remains delicately in the balance on the last day of 2012. In just twenty-four short hours, unless a deal is negotiated and voted on by the US Congress – along with the support of the President Obama – the United States is set to go off the so-called “fiscal cliff” and possibly slump back into a recession. The term “fiscal cliff” has become the code-word for the automatic government programs that kick in on January 1st, which consists of massive cuts in government spending and large increases in taxes – approximately $600 billion worth.
And as the fiscal cliff has been approaching, US equity markets have been feeling the pain. Just a week ago, the Dow Jones Industrial Average, an index for 30 of the biggest companies in the world, touched 13,310 points. But since Congress has been unable to pass a deal, the DJIA is down to only 12,938. The same goes for the other US exchanges.
Interestingly, gold and silver have remained relatively sideways – even gaining at moments – over this last week of 2012. For instance, gold spot price started at around $1647 an ounce and ended at $1657. Similar with silver – starting at a spot price of $29.80 an ounce and ending at over $30. How gold and silver will react tomorrow on news if, or if not, US lawmakers pass a fiscal cliff resolution remains to be seen. How gold and silver will act in the long-run, however, is a question that many economists are commenting on. See here Alasdair Macleod’s forecast and here Von Greyerz’s forecast on KWN.