World hinges on US debt ceiling crisis
ALBWABA – Gold prices rose by 0.2 percent on Monday to $2,015 on the ounce, whereas the U.S. dollar fell by 0.05 percent to 102.45 points, as congressional debate continues on US debt ceiling, according to Investing.com.
Concerns over the ongoing US debt ceiling crisis and an impending economic slowdown have driven demand for gold, the trading platform reported.
Gold and the U.S. dollar are now stable at $2,019 per ounce, reports have confirmed.
However, gold recorded a weekly loss of 0.2 percent following two weeks of gains, with futures contracts for June dropping slightly by 0.03 percent, approximately $0.07.
The monthly consumer confidence index declined by 9.1% in May, halving the gains gold has accumulated since hitting an all-time low last June.
Nonetheless, due to the recent interest rate hikes by the US Federal Reserve Board (the Fed), the dollar has seen an increase in value to a record high, Investing.com reported.
The rise in the value of the dollar against major currencies, and the recent unexpected decline in U.S. inflation rates, put pressure on gold prices worldwide.
Usually, investors look to invest in gold in times of financial and economic crises.
The Fed’s ability to retain the value of the U.S. dollar and investor confidence in the central bank’s ability to maintain favourable economic conditions looking forward may have curbed the climb of gold prices.
The Congressional Budget Office said the deadline for the federal government to default on all its obligations is June 1.
With some leeway, a grace period may be extended for the first two weeks of the month, if the debt ceiling remains unchanged.
Otherwise, “the whole world is in trouble,” according to U.S. President Joe Biden.
