Gold futures basis the most active June 2023 Comex contract traded briefly below the 100-day simple moving average at $1939.50. Gold futures traded to a low of $1939 just $0.50 below its 100-day moving average which technical traders use as a benchmark to determine the interim trend of a stock or commodity.

Market participants are witnessing extreme dollar strength and exceedingly high yields in short-term Treasury Bills as continued uncertainty and angst surrounding negotiations to raise or suspend the debt ceiling are still at a stalemate. The US dollar has climbed higher for the last three consecutive weeks after trading to a low at the beginning of May at 101.

Short-term T-bills maturing between June 6th through 15th are currently yielding 5.997%, an indication of the angst regarding whether a debt ceiling resolution can be reached on time before threatening a government default of its financial obligations.

The latest round of debt-ceiling talks between the President and House Speaker began tonight at 5:30 PM EDT. While both sides have presented optimism on passing legislation that would temporarily suspend, or raise the debt limit ceiling, the Democrats and Republicans are still far apart.

In the mid-1990s as a young technical market analyst I was invited to speak at the Dow Jones Financial Symposium, a three-month lecture tour of which I attended one full month speaking at eight cities. Many of the top technical analysts were also speakers with long histories as technical analysts.

Over the last few weeks, there has been a pivot in market sentiment for gold moving it from bullish to bearish. On Tuesday, May 16 gold futures basis the most active June contract opened at approximately $2020 per ounce. Today gold futures traded to a low of $1954.40.

In the span of just under two weeks, from Thursday, May 4 to Wednesday, May 17 we have seen gold drop substantially and concurrently the dollar gained substantially.

The Washington standoff over raising the debt ceiling has raised economic concerns on a global basis. Treasury Secretary Janet Yellen again warned on Monday that a

U.S. default could come as early as June 1st. Her dire warning is also confirmed by projections of both the Bipartisan Policy Center and the Congressional Budget Office.

A second debt limit meeting between President Joe Biden and Senate majority leader McCarthy and other top congressional leaders will be held tomorrow, Tuesday, May 16. The divide between both sides was too wide for any progress to result from their first meeting. Staff on both sides negotiated through back channels to find common ground and potential compromises over the weekend.

The Washington standoff over raising the debt ceiling has raised economic concerns on a global basis. A nonpartisan congressional report cited a “significant risk” of a historic default within the first two weeks of June. A report by the U.S. Congressional Budget Office confirmed statements by Treasury Secretary Janet Yellen warning that a government default could come as early as June 1.