Gold fell after the decision on the U.S. national debt

Gold fell after the decision on the U.S. national debt

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.

Leave a Comment