📌 US Govt Shutdown – What It Means for Traders 🔎 What is a...

📌 US Govt Shutdown – What It Means for Traders

🔎 What is a Shutdown?

When US lawmakers fail to pass spending bills or a temporary funding extension, the govt runs out of money. “Non-essential” services halt, lakhs of employees go unpaid, and key data releases get delayed.

🗓 Dates to Watch

Fiscal Year ends Sept 30, 2025

If no deal by midnight → Shutdown begins Oct 1

Since 1976, there have been 21 shutdowns (avg length: ~8 days). The longest was 35 days in 2018–19.

📜 History Lesson

2011: No shutdown, but debt-ceiling fight → S&P cut US credit rating to AA+. Global markets shook: US stocks fell 17%, gold spiked, volatility surged.

Past shutdowns usually dent confidence but rarely cause lasting damage.

🏛 Present Political Climate

Washington is deadlocked: House Republicans vs Senate Democrats.

President Trump has pulled back from talks, preparing agencies for mass layoffs.

Odds of a shutdown (Kalshi data) remain elevated into Oct.

💹 Why Markets Care

Bullion (Gold & Silver) 🟡⚪️ → Classic safe-haven demand. Past shutdowns have added 2–5% upside.

Base Metals ⚙️ → Risk-off mood may weigh on copper, aluminium etc. Industrial slowdown fears resurface.

Energy (Crude, Gas) 🛢🔥 → Short-term demand worries = pressure on prices. But geopolitical risk can counter.

Currencies 💱 → USD usually softens; Yen & Swiss Franc strengthen.

US Treasuries 📉📈 → Bond buying rises (safe-haven bid). Yields dip, curve flattens.

US Stocks & VIX 📉⚡️ → Equities wobble, small-caps hit harder. VIX volatility index jumps 10–20% in many shutdowns. Relief rallies follow resolution.

⚡️ Takeaway for Traders

Shutdown = uncertainty + volatility.

👉 Gold, Silver stay supported.

👉 Dollar shaky, watch USD/INR for indirect cues.

👉 Crude/NatGas choppy on demand fears.

👉 Stocks & VIX signal global risk sentiment.

🔔 Bottom Line: “Shutdowns don’t break markets, but they do bend them. Stay hedged, stay nimble.”

Disc: https://www.kotaksecurities.com/disclaimer/commodities – Kotak Securities