(MENAFN) Last week witnessed a notable shift in the commodity market as prices began to rise, shaking off the selling pressure that had persisted in previous weeks. One key factor contributing to this upward trend was the easing of demand concerns, driven by growing expectations that the US Federal Reserve would refrain from raising interest rates. Additionally, optimism surrounding the resolution of the debt limit issue further alleviated market uncertainties.
On Saturday, US President Joe Biden signed the debt ceiling bill into law, effectively averting a potentially catastrophic default on the nation's debt prior to the June 5 deadline. This decision ensures that the federal government can continue to meet its financial obligations without the risk of running short on cash. The news of the debt limit resolution provided reassurance to investors and contributed to a more positive sentiment in the commodity market.
The bill, which was passed by the US House of Representatives with a decisive 314-117 vote, was subsequently sent to the Senate for approval. The bipartisan support for the bill, with 165 Democrats and 149 Republicans backing the negotiated agreement between House Speaker Kevin McCarthy and President Biden, signaled a willingness to address the debt limit issue and avoid potential economic disruptions.
In response to these developments, the price of gold, which had experienced a three-week downward trend, ended the week on a positive note, reaching USD1,948.35 per ounce with a modest 0.1 percent increase. Silver also saw a notable uptick, rising by 1.3 percent over the course of the week. However, platinum experienced a slight decline of 1.8 percent, while the price of palladium remained relatively stable.
The overall market sentiment reflected a growing sense of optimism as concerns about demand in the commodity market began to dissipate. With expectations of a more accommodative monetary policy from the US Federal Reserve and the resolution of the debt limit issue, investors displayed renewed confidence in the commodity sector. However, ongoing market dynamics and global economic factors will continue to play a role in shaping the trajectory of commodity prices in the weeks to come.
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