Gov’t shutdown would spur quick gold rally: Trader – CNBC

The chances of a partial government shutdown in the week ahead appear to have fallen substantially with the announced resignation of House Speaker John Boehner. But if a deal does not get done, look for a speedy rally in gold, says trader Phillip Streible.

“If we do have a shutdown … the gold bugs are going to come out to work here,” the senior market strategist at RJO Futures said Friday on CNBC’s “Trading Nation.”

Streible reasons that some will think a partial shutdown is a sign to get into safe-haven assets, a group that gold arguably belongs to.

After all, when a shutdown occurs, “people go without paychecks, uncertainty is risen, and everybody gets a little less confident in the federal government—no matter how unconfident they may have started out,” Max Wolff of Manhattan Venture Partners said Friday.

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With gold currently near $1,135 per troy ounce, the commodity will be worth a look once it breaks back above resistance at $1,151, Streible said. Once that happens, “we’ll probably push on up to about the 200-day moving average at $1,174.”

Yet he doesn’t expect the rally in gold to last long.

“Right around then, coming into the end of the week, we probably see the resolution being done, and gold will probably come off from that,” he said.