Us Debt-Ceiling Talks Stall

10 May, 2023

As at 10am, AEST.

Gold Spot Price AUD $3010

Silver Spot Price AUD $37.95

Platinum Spot Price AUD $1640

Lawmakers are running out of time to reach a consensus on the U.S. debt ceiling, and the potential consequences of a government default would very likely impact the strength of the U.S. dollar. Since late September, the ICE U.S. Dollar Index (DXY) has decreased by 11%. Treasury Secretary Janet Yellen has now issued a warning that a default on U.S. debt would have a negative effect on the dollar's status as a reserve currency. No progress has been made to increase the debt ceiling to date.

Currency volatility could increase with the release of inflation data and as the U.S. debt-ceiling debate continues to provoke anxiety among traders. US CPI data is due for release tomorrow (Australia time). A reduction in CPI could see the FED celebrate their efforts over the past year. An increase or stable print in CPI could see the FED consider more interest rate hikes to control inflation further.

With the middle class now absorbing the effects of these continued rate hikes, much of this class are starting to reach the point of despair with increased mortgage payments, increased cost of product and services and little to no wage relief to countermeasure inflation.

Gold and Silver continue to show strength on the back of weak economic news.

Gold’s pricing position is now stabilised above the $US2000 mark and silvers comfortably.

*Not financial advice, please do your own research prior to any investment decisions you make.

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