Wall Street Losses and More
S&P’s 500 index futures accepted quotations at around 4,425 points and fell 0.18% early on Tuesday. As such, there’s a mixed catalyst in the risk barometer following the expansion of Wall Street’s losses.
The headlines of negative risks are related to the extension of the U.S. debt limit and the spending bill on infrastructure. Earlier in Asian territory, Janet Yellen (U.S. Treasury Secretary) pushed for a rapid resolution of the debt ceiling after the Senate failed to advance measures to suspend the federal debt ceiling and avoid partial government shutdowns.
However, the U.S. Senate Democratic leader Chuck Schumer said that the Democrats will take further action this week to avoid government shutdowns and debt defaults.
In addition, the speaker of the House of Representatives Nancy Pelosi expressed optimism the day before to resolve the deadlock in the U.S. infrastructure stimulus bill but hinted that the figure was lower than President Joe Biden’s $3.5 trillion.
The State of Silver
Silver fell back down at $22.60 after closing high for the first time during the Asian session on Tuesday. The metal broke the downward resistance line since September 16 on the previous day. However, it failed to break the 50-SMA prior to the recent pullback.
And yet, the momentum is conducive to silver’s rebound in its annual low set last week. Therefore, buyers are likely to wait until there is a clear upward breakthrough of the 50-SMA, about $22.65, before re-entering the target threshold of $23.00.
Be that as it may, the three-week downward trend and double raises at about $23.05 to $23.15 respectively since September 17. This is going to be the primary hurdles for traders of XAG/USD to overcome prior to regaining control.
Urgent Attention on Debt Limit
In her latest comments, U.S. Treasury Secretary Janet Yellen urged Congress to quickly resolve the debt limit issue. Earlier on Monday, Bloomberg reported that according to their sources, the finance minister had refrained from talking to the troubled International Monetary Fund (IMF) president Kristalina Georgieva.
In order to emphasize the importance of the news that there was no talk between U.S. Secretary of the Treasury Yellen and Georgieva of the International Monetary Fund, Bloomberg mentioned that the United States is the largest shareholder of the International Monetary Fund and the World Bank, and the Treasury Department Responsible for managing these relationships.
The Outlook of Gold
Gold was mixed at the beginning of the week. Recently, there have been some hidden bullish divergences in the hourly time frame, which provided some support for gold during the U.S. time.
When we entered the last hour of Wall Street, the precious metal was flat at $1,751 and fluctuated between the day’s low of $1,744.88 and $1,760.91. Nevertheless, the bulls are under pressure, technically prices are below the 4-hour 200, 50, and 20 EMA, and the RSI is below 50.
If the price fails to break through $1,760 at the close of the trading days in the next few trading days, this may lead to further supply and extend downward to $1,730. The fundamental risk in the future stems from the strong remarks of the Fed spokesperson.
As such, this may be led by Fed Chairman Jerome Powell, who will speak in Congress with Treasury Secretary Janet Yellen on Tuesday.