US Treasury Secretary Janet Yellen recently called on the Congress to raise or suspend the public debt ceiling. Her statements came amid escalating tensions between Democrats and Republicans.
Yellen explained that raising or suspending the ceiling does not increase government spending, but will allow the Treasury to pay previously approved expenses. Failure to fulfill such obligations will entail damage to the US economy. Earlier, Republicans and Democrats worked together to fulfill this duty.
What urged Yellen to bring the issue up is the decision of Democrats not to include the debt ceiling in their budget plan.
In addition, the suspension implemented on borrowing restrictions ended last July 31.
Yellen also warned before that the Treasury might exhaust its special measures.
Now, the US national debt is at $ 28.4 trillion.
The gold market was not affected by these statements, obviously busy escaping the sudden crash it experienced last Sunday.
Analyst Jim Wyckoff said the recently published reports on the US labor market pushed US stocks to record highs, lifted the US dollar index and pushed US Treasury yields, all of which are negative elements for precious metals.
Better-than-expected employment statistics also fueled rumors that the Federal Reserve will soon consider tapering.