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Gold Ends Up But Renewed Pressure Seen Without Stimulus Deal

Commodities Oct 19, 2020 03:57PM ET
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© Reuters.

By Barani Krishnan

Investing.com - Gold prices rose on Monday but renewed pressure seems likely for the yellow metal as a new coronavirus stimulus deal between the White House and Congress remained elusive.

Those familiar with negotiations on the stimulus said there was still distance between the Republican administration of President Donald Trump and the Democrat Congress led by House Speaker Nancy Pelosi.

Pelosi said Sunday that she was optimistic legislation could be pushed through before the November 3 U.S. election. White House Chief of Staff Mark Meadows also expressed hope on Monday that a deal was possible, saying the administration has gone as far as offering $1.9 trillion versus the $1.8 trillion package proposed earlier.

Yet, a standoff between the two sides lingered, and that weighed on gold prices in late trading.

U.S. gold for December delivery was at $1,905.35, down $1.05, or 0.1%. It settled Monday’s official trading session up $5.30, or 0.3%, at $1,911.70/oz.

Spot gold, which reflects real-time trades in bullion, up $2.02, or 0.1%, at $1,902.19 by 3:51 PM ET (19:51 GMT).

Congress, led by Pelosi and the Democrats, approved a Coronavirus Aid, Relief and Economic Security (CARES) stimulus in March, dispensing roughly $3 trillion as paycheck protection for workers, loans and grants for businesses and other personal aid for qualifying citizens and residents.

Democrats have been locked in a stalemate since with Republicans, who control the US Senate, on a successive package to the CARES, arguing over the size of the next relief, as thousands of Americans, particularly those in the airlines sector, risked losing their jobs without further aid.

President Donald Trump trails Democrat challenger Joe Biden in most polls ahead of the November 3 election. A preliminary agreement over the stimulus could be a positive talking point for the president at his campaign rallies.

Gold Ends Up But Renewed Pressure Seen Without Stimulus Deal
 

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Comments (5)
Pwr Strk
Pwr Strk Oct 19, 2020 7:12PM ET
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paper gold is just another stock
Teh Olympian
Teh Olympian Oct 19, 2020 5:51PM ET
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Increased spending makes more money available for spending. Businesses sell more and are more profitable. To make money available for investing in these stocks, investors are selling inert investments like gold.
Dan OGrady
Dan OGrady Oct 19, 2020 4:37PM ET
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Barani, can you get together with your media pals and all agree to never report these obviously fake stimulus hopes again (prior to the election)
Barani Krishnan
Barani Krishnan Oct 19, 2020 4:37PM ET
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Dan, seriously I wish to do the same. Unfortunately, the White House isn't giving up in trying to give these faux thrills to the market, probably because someone needs it for his stump talk if something comes through.
Berat Arda Dedekoca
Berat Arda Dedekoca Oct 19, 2020 4:37PM ET
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Gold just worn the swimsuits and getting ready to dive deeper
Barani Krishnan
Barani Krishnan Oct 19, 2020 4:37PM ET
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That seems to be the case :)
Stuart McWhirter
Stuart McWhirter Oct 19, 2020 4:16PM ET
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Why would Gold be under pressure? The USD is dead as it is, further stimulus only expedites the process. Physical gold is under zero pressure.
Barani Krishnan
Barani Krishnan Oct 19, 2020 4:16PM ET
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Stuart, as hard as it may be for us to fathom, there's a constituency out there bent of shorting gold whenever the words stimulus and gold aren't together on the same sentence, and in a positively correlated way :)
 
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