Silver spot price rises as US enters another debt limit twilight zone
New York (Feb 10) Spot silver has so far today continued its march higher, with the price reaching a two-week high of $20.278 just before the New York opening. The precious metal has benefitted from renewed interest in safe-haven bets as the United States government embarks upon the latest of its debt limit impasses.
Congress needs to raise the federal debt ceiling by 27 February to avoid a potentially catastrophic default on the country’s obligations, Treasury Secretary Jack Lew warned on Friday in a letter to Speaker John Boehner.
The message comes after the temporary suspension of the debt ceiling, agreed last October, expired on 7 February and with the Capitol yet to act to approve a normal borrowing authority.
Lew noted that the Treasury “must begin implementing extraordinary measures that enable us, on a temporary basis, to protect the full faith and credit of the United States and to continue paying the nation’s bills”.
The Treasury Secretary emphasized that “these measures are more limited than in past debt limit impasses”, adding that on the basis of the most recent information, the emergency measures might not last beyond 27 February. At that point, absent a new deal, the Treasury would be left with cash in hand and any incoming revenue to meet the federal government’s commitments.
Analysts at Scotiabank “doubt that this deadline[27 February] will exhaust the full realm of imaginative ways of getting around the debt ceiling, but each option carries substantial risk and merely pursuing them would risk further unfavourable action by rating agencies and markets”.
House Republicans are reportedly formulating their final stance on the debt limit, including the possibility of attaching a “doc fix” – a limit on physician payments - on Medicare reimbursement rates and renewing some military benefit cuts from last year’s budget deal. The plan has yet to be completed, despite calls from leading House conservatives to stop the political theatrics.
Meanwhile, Reuters is right now reporting that a meeting has been arranged for this evening DC time, to thrash out remaining cross-party issues with the debt ceiling. It’s expected to run late.
Currently, silver is trading at around $20.159 up 0.46 percent intraday.