Commodities News Spotlights

Gold Shows No Reaction to Debt Ceiling Deal, Prices Float Near $1,945

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The yellow metal was in theory supposed to act as a safe haven closely tracking the debt limit talk. What happened?

Gold prices kicked off the week on a muted tone despite US policymakers agreeing on a tentative debt ceiling deal. While the agreement is super positive for the US economy, and carries global repercussions, gold didn’t break character and remained on a fairly upbeat trajectory. Why is that?
Even though Capitol Hill was able to strike a deal, with the blessing of President Biden, the agreement still needs to be passed by Congress and the Senate. Further, a deal doesn’t mean the US Treasury is flourishing and can start lavishly spending again.
The markets are now in a jittery mood and gold bugs likely prefer to stay diversified with a pinch of bullion in their wallets. Also, technically, XAU/USD is now at a potential inflection point and about to either bounce off of an ascending trend line or break it to the downside.

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