The upcoming FOMC meeting brings additional concerns about the debt ceiling and banking crisis to reemerge. As a net result, gold performs a tremendous uptrend surge. The yellow metal futures were traded to a high of $2026 yesterday.
Traders can actually see how the asset is breaking a pattern also known as a descending top and a flat bottom. The situation may change when the FOMC concludes today.
Investors stay quite pessimistic, as all market participants expect the FED to announce a ¼% rate hike. So, most traders concentrate on their potential calamities and new investment opportunities across different financial markets.
The minds of practically all market participants are busy with thoughts about the re-emerging banking crisis in addition to the debt ceiling. These concerns appeared to be the dominating force making only 15% of respondents believe the FED would cut the interest rate after the FOMC meeting today.
Besides, people were so focused on the bank collapse, they did not pay enough attention to the debt ceiling. According to U.S. Treasury Secretary Janet Yellen, they would no longer be able to satisfy the government’s requirements. The statement appeared after reviewing recent federal tax receipts.
At some point, the Democratic and Republican Parties must find a compromise. The main problem here is they do not have much time for this compromise. In a few days, the Senate and the House members will meet the president to discuss possible resolutions.
If the two sides do not agree on the compromise, we will find ourselves in an unprecedented situation. The economic effect can be dreadful.
May the trading luck be with you!
