The price of gold has fallen slightly following news that Washington politicians have found common ground to raise the ceiling on U.S. national debt. The August contract fell $ 4.20 (0.3%) to $ 1596.90 an ounce.
U.S. President Barack Obama has said he is ready to approve a $ 100 million short-term increase in government debt, which will last a few days. This will give politicians more time to adopt a bipartisan plan to reduce the budget deficit.
After the adoption of this plan, Obama will have the legal right to raise the U.S. national debt ceiling by $ 2.5 trillion. Under the plan, the federal budget is expected to save $ 3.7 trillion over the next ten years. But Texas Congressman Ron Paul, a staunch opponent of raising the debt ceiling, said the plan does not include cuts in social security, health insurance and military spending, which cost the country $ 1 trillion a year . Given that annual tax revenues will not exceed $ 2.5 billion in the coming years, the government will have to borrow $ 500 billion annually.
Markets also breathed a sigh of relief after it became known that French President Nicolas Sarkozy and German Chancellor Angela Merkel, after a six-hour conversation in Berlin, had agreed to provide new financial aid to Greece.