Spot gold rebounded in Asian trading on Wednesday, with the latest price to break above $1,865 an ounce. The DOLLAR index fell back, now at around 90.45, a weak dollar positive gold trend. A mutation from a British novel Coronavirus continues to attract attention. The CDC said the mutation may have spread in the United States, and the news triggered a heightened risk aversion in the market, driving up gold prices. However, the US economic stimulus bill was thrown into doubt after President Donald Trump threatened that he might not sign the $900bn new champions bailout bill. Negative developments in the US fiscal stimulus have curbed gold’s momentum for a rebound.
Mr Trump has threatened not to sign the $900bn Coronavirus bailout bill
According to Reuters on Tuesday, US President Donald Trump threatened on Dec 22 that he might not sign a new $900bn bailout bill passed by the US Congress, which includes money urgently needed by Us individuals. It comes just days after the White House hinted that President Trump would sign the bill. Mr Trump said he would ask Congress to “fix” the bill, increase the size of stimulus checks and eliminate wasteful spending.
Trump said Late Tuesday he will ask Congress to amend the newly passed $900 billion New Bailout bill, saying it contains too much foreign aid and not enough for struggling Americans, the Washington Times reported.
In a tweet late Tuesday, Trump called the $900 billion relief bill passed by Congress an inappropriate “disgrace” and urged lawmakers to make a series of changes to the bill, including increasing direct subsidies to individuals and families.
Less than 24 hours after the Senate passed the bill, Mr. Trump posted a video on Twitter in which he discussed what he thought were the bill’s many flaws. President Trump has asked Congress to revise the government spending plan to fight the epidemic. Mr Trump said the bill included unnecessary parts.
Mr Trump has asked members of Congress to increase the amount of stimulus checks that most Americans can receive from an “absurdly low” $600 to $2,000, or $4,000 for couples.
“I’m asking Congress to change this law to raise the ridiculously low $600 to $2,000, or $4,000 for a couple,” Mr Trump said in the video.
Mr. Trump also said that if Congress failed to provide the bailout package he wanted, it would be left to the next administration. “Maybe it will be me,” he said. “We will get this done.”
In the video, however, Mr. Trump did not threaten to veto the bill.
Market risk sentiment worsened after Mr Trump asked Congress to revise the latest spending bill. S&p index futures reversed course from a 0.2 per cent gain to a 0.6 per cent loss. Nasdaq futures fell nearly 0.5%, while Dow Jones industrial Average futures fell 0.4%.
Late on The night of December 21 local time, both houses of the US Congress passed a spending package totaling about $2.3 trillion to combat the COVID-19 epidemic. It is one of the largest bills ever passed by the U.S. Congress, including an estimated $900 billion epidemic economic rescue bill and a $1.4 trillion budget bill for fiscal year 2021.
In a post on social media, U.S. President-elect Joe Biden praised Congress for passing the bill and asked it to support the new administration’s response plan.
In the latest response to Trump’s threats, The Speaker of the US House of Representatives Nancy Pelosi said Democrats would support a proposed $2,000 COVID-19 aid check.
Novel Coronavirus may have already spread in the US
Novel Coronavirus mutation appeared in The UK, announcing lockdown measures in order to control the epidemic, which gave a boost to gold. Novel Coronavirus variant is spreading rapidly across London and the south-east of England and experts say it is 70 per cent more contagious than the original virus strain.
At a press conference on December 19 local time, Prime Minister Johnson said that the number of confirmed cases in the UK had soared in the past two weeks thanks to a new variant from novel Coronavirus, which scientists believe is 70 per cent more contagious than the original strain. Mr Johnson said London and the south-east and east of England would rise from the current level three to level four for two weeks from December 20, in line with the widespread “foot restraints” that England introduced in November.
Novel Coronavirus is under consideration by British Prime Minister Boris Johnson to block more areas in England, according to sources on December 22.
Flights from The UK to Spain, India and Hong Kong have been suspended after the discovery of the novel Coronavirus strain. More than 40 countries around the world have imposed entry bans on the UK. Concerns about the rapid spread of the newly discovered coronavirus strain in the UK have investors looking for a safe haven in gold.
There is still no us travel ban on travellers from the UK. According to Reuters, members of the White House’s COVID-19 task force requested pre-flight screening of passengers, but the Trump administration has decided not to take any action for now.
Novel Coronavirus, a mutation first discovered in the UK, may have spread in the US, CDC said on Dec 22.
“Given the continuing travel between the UK and the US and the high prevalence of the novel coronavirus in the UK in the current novel coronavirus epidemic, it is highly likely that the mutation has already spread in the US,” CDC said in a statement.
The mutated virus may have entered the United States and must be treated with caution, U.S. infectious disease expert Dr. Anthony Fauci said Tuesday.
Suki Cooper, an analyst at Standard Chartered, said: “With gold up more than 20 per cent this year, it is vulnerable to profit-taking before the end of the year, but some risks remain against the backdrop of tighter blockade and restrictions, new strains of the virus and brexit negotiations.”
Aberdeen Standard Investments wrote in a report that gold investors should not give up on the precious metal as the epidemic will continue to spread through most of 2021, the US economy will need further support and gold is expected to break through $2,000 an ounce again in the coming year. It said: “As things stand, the new anti-pandemic bill will not be the last, as we face structural problems that, from an economic perspective, will haunt us in the coming year. “Interest rates will not rise next year and that will be important support for precious metals.”
Gold prices fell sharply on Tuesday, falling as low as $1,852.80 an ounce, according to Economies.com. Gold is expected to be bearish in the coming trading sessions. We are still waiting for confirmation that gold is below $1852.80 / oz support or above $1875.00 / oz resistance for a clear target for the next move.
If gold falls below $1,852.80 a Troy ounce, this could push prices lower, with the first target at $1,800.00 an ounce, According to Economies.com. On the other hand, once gold breaks $1,875.00 / oz resistance, this will reactivate the bullish trend scenario with the next target at $1,916.00 / oz and the higher target at $1,928.60 / oz.