Equities Up, Gold Down as Debt Ceiling Discussions Register Progress

In recent weeks, the United States and the world at large have waited with bated breath as American lawmakers have discussed the possibility of raising the country’s debt ceiling. With millions of Americans currently experiencing a cost of living crisis, there have been fears that a debt default by the U.S. could have a significant economic impact.

As last week drew to a close, Republicans had not offered President Joseph Biden a deal even as the country hurtled toward a disastrous debt default that threatened every American’s future. Because a debt default could cost millions of jobs, cause a 4.6% drop in GDP and eliminate a whopping $10 trillion in household wealth, this uncertainty has resulted significant volatility in the equities and commodities markets.

Gold saw its prices drop to a two-month low toward the end of the week while global equities were bolstered by the talks on America’s debt ceiling. After struggling to perform for several months amid high-interest rates and weak economic data from the Fed, the greenback soared to a two-month high. U.S. treasury yields were also up while overseas markets in Europe, due to increased pressure as Germany, the region’s most robust economy, slid into a recession and caused the euro to drop by 0.2%.

According to a source close to the matter, President Biden and Speaker Kevin McCarthy were close to making a deal and just had to figure out a $70 billion difference before announcing it. In the meantime, the Dow Jones Industrial Average overturned prior losses and rose by 0.04% to 32,812.29 while the S&P 500 rose up by 1.05% to 4,158.62. The Nasdaq Composite also registered a positive performance amid debt-ceiling discussions, increasing by 1.01% or 238.79 points.

Markets were particularly bolstered by news that NVIDIA shares had increased by 24% after a recent capitalization brought its value to nearly $1 trillion. The MSCI world equity index also saw a gain of 0.27% while the pan-European STOCC 600 index saw losses of 0.3% for three consecutive days and closed at around 2.7% down. In Asia, Hong Kong went down by 2% to hit its lowest level this year due to international concerns about major Chinese technology companies listed in Hong Kong, such as Alibaba and Tencent.

Gold prices also faltered amid the debt-ceiling talks, with spot gold prices falling by 0.74% to $1,942.48 an ounce and gold futures trading dropping by 1.1% to $1,943.70.

Mining companies such as Canada Nickel Company Inc. (TSX.V: CNC) (OTCQX: CNIKF) are likely to follow developments on Capitol Hill closely given the possible adverse ramifications of the failure to secure a deal in time for the United States to avoid defaulting on its sovereign debt.

NOTE TO INVESTORS: The latest news and updates relating to Canada Nickel Company Inc. (TSX.V: CNC) (OTCQX: CNIKF) are available in the company’s newsroom at http://ibn.fm/CNIKF

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