$2 Trillion Stimulus Is Coming! Gold short – term dive after rebound more than $10! Gold is back above 1840! The dollar index rushed up and fell! Biden to unveil details of the stimulus plan!

Thursday (January 14) sub-market intraday, financial markets have been volatile. The dollar index short – term fast pull up, once close to the 90.50 level. Spot gold plunged briefly to below $1,830 an ounce as the dollar index surged, but rallied on expectations of a massive U.S. economic stimulus package and is now above $1,840 an ounce. Investors will be paying close attention to Biden’s speech and details of a new U.S. rescue plan on Thursday night.

U.S. Treasury yields held near recent highs as the dollar rose, while spot gold ended lower on Wednesday. Spot gold settled down $9.26, or 0.50 percent, at $1,845.36 an ounce, after hitting as high as $1,862.92.

According to Economies.com, gold faced solid resistance at $1,863.80 an ounce on Wednesday, with the price falling significantly and heading toward a key support level of $1,838.10 an ounce.

The dollar rose sharply in the sub-session on Thursday, hitting as high as 90.48, as expectations for a sustained U.S. economic recovery provided support for the greenback. Fed officials expect the economy to recover quickly if the pace of new vaccine vaccination picks up.

Joe Manimbo, a senior market analyst at Western Union Solutions in Washington, said in a report that the rise in 10-year Treasury yields above 1% is providing more solid support for the dollar.

However, the gains against the U.S. dollar index did not last long, with the greenback quickly falling after hitting a session high and now trading around 90.35.

The dollar index’s rally pushed gold prices back above $1,840 an ounce after falling to $1,828.76 at one point. In addition, expectations of a massive U.S. stimulus package have provided momentum for gold’s rally.

Biden’s aides recently told Allies in Congress that the size of the rescue package is about $2 trillion, CNN reported, citing sources familiar with the matter, according to ZeroHedge, a leading financial website on Thursday.

One lawmaker who has been in close contact with Mr Biden’s team said it had “set great goals” for the package, although the exact size could change.

Jim Wyckoff, an analyst at Kitco.com, said in a daily report that gold has been in a stable range recently but is trending lower, with a potential break below the key $1,800 / oz level.

Economies.com points out that as long as gold remains above $1,838.10 an ounce, the bullish view will remain in force. Gold needs to break at $1,863.80 / oz to get a strong positive push to help propel the rally towards the first bullish target of $1,80.00 / oz.

Biden to unveil details of economic stimulus plan alert to market volatility risks

On January 8, 2021, US President-elect Joe Biden said that he would propose a comprehensive stimulus package, and the scale of the stimulus plan would be trillions of dollars. Biden said prominent economists agree that in order to prevent the economy from collapsing this year and getting worse, it is time to invest a lot of money to grow the economy.

Mr Biden said he would unveil a plan on Thursday to provide trillions of dollars in support to the US economy as it deals with the coronavirus crisis.

Biden called for additional relief “now” after the latest jobs report on Friday showed the first decline in eight months. Mr. Biden will unveil details of the stimulus plan on Thursday.

According to foreign media reports, Biden will deliver a speech on the bailout bill at 19:15 local time on Thursday (08:15 Hong Kong time on Friday).

Investors are betting that Biden will unveil further stimulus legislation when he takes office on January 20, MarketWatch reported.

Since gold is often seen as a hedge against inflation and currency depreciation, a big stimulus package would boost demand for the precious metal.

In late December 2020, Congress passed a $900 billion economic rescue bill, which Biden called an “up-front payment.”

On Wednesday, a person familiar with the matter said Senate Democratic Leader Chuck Schumer was pushing Biden to provide more than $1.3 trillion in aid for the new pandemic.

Bob Haberkorn, senior market strategist at RJO Futures in New York, said expectations of more stimulus, higher-than-expected inflation data and risk aversion from the U.S. political environment were all factors pushing gold higher.

Michael Hewson, the chief market analyst at CMC Markets UK, said: “We have uncertainty about the outlook for the fiscal stimulus package in the coming months and until we get more detail gold could move in either direction.”

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