USA Debt Ceiling Impasse and Precious Metals

The United States is currently facing a disagreement between Democrats and Republicans when it comes to the debt ceiling. The debt ceiling sets a limit on how much money the US government can borrow, and both sides can't seem to reach an agreement on it. This issue has caused problems before, with no compromise reached among the parties in Congress. They're using the debt ceiling as a political tool, each side trying to gain an advantage. The negotiations between President Biden and members of Congress on the debt ceiling have been postponed to next week, which has caused concerns in the markets. Treasury Secretary Janet Yellen has warned that if they can't come to an agreement on the debt ceiling, it could lead to a disaster for the US economy, and the government might face a shortage of cash.

All this uncertainty has put pressure on precious metals because the US dollar has been getting stronger. The price of gold, for example, has dropped to around $2,005 per ounce. This week, there has been a decrease in consumer and producer inflation in the US, which has strengthened the belief that the Federal Reserve might hold off on raising interest rates. Considering all these factors, it's possible that the expectation of lower interest rates and the issue of the debt ceiling might create an opportunity for a short-term increase in the price of gold. On the other hand, ongoing geopolitical risks and concerns about an economic slowdown are making people more interested in investing in safe-haven metals.

Looking at it from a technical perspective, with the drop in the price of gold, we are watching the $2,000 level as the first support. If it goes below that, around $1,970, it could be seen as a good time to buy. Given the increased demand for precious metals due to the reasons mentioned earlier, it could lead to another attempt at reaching the all-time high of $2,070.