Big progress on Biden’s $1.9 Trillion Stimulus Plan! At one point, the price of gold approached $1,715! Be alert to this factor to ignite the gold price drop again!

Monday (March 8) sub-session, the dollar index strengthened, is now trading around 92.10; Spot gold pared gains on the day to trade at around $1,707 an ounce, having surged to around $1,715 an ounce in early trading. Analysts said gold jumped at the start of the Asian session after the U.S. Senate passed Joe Biden’s $1.9 trillion economic stimulus plan over the weekend and positive developments on fiscal stimulus boosted investor demand for the metal. But the news also sent the dollar and Treasury yields higher, limiting gold’s losses. Analysts said recent high Treasury yields have put significant downward pressure on gold, and if yields continue to climb, gold could suffer another round of declines.

The US Senate voted 50 to 49 on March 6 to approve a $1.9 trillion economic stimulus package to deal with the impact of COVID-19 on the economy. The plan will go back to the House for reconsideration and a vote. President Joe Biden said the legislation will not only help the economy recover, but also help America’s children, families and the health care industry, and most importantly, it will take effect soon.

The bill includes direct payments of up to $1,400 to most Americans, unemployment benefits of $300 a week through September, and a one-year extension of the child tax credit. For individual tax filers earning more than $75,000, families earning more than $112,500, and joint filers earning $150,000, the stimulus check size will decline. Reuters reported that the passage of the $1.9 trillion economic stimulus package means the US government is on track to start making direct cash payments of $1,400 per eligible American this month.

The latest positive developments in the U.S. fiscal stimulus boosted investor demand for gold, which jumped as high as $1,714.23 an ounce in early Asian trading on Monday.

The U.S. Congress is increasingly likely to pass President Joe Biden’s $1.9 trillion economic stimulus plan, raising concerns about a possible surge in inflation. Gold is seen as a hedge against inflation.

Ole Hansen, head of commodity strategy at Saxo Bank, said he is bullish on gold in the near term because he expects the metal to hold its recent 11-month low of support.

Adrian Day, president of Diane Asset Management, said he was bullish on gold because the recent sell-off appeared overdone.

Economies.com has said gold has found solid support at $1692.00 an ounce and is showing some bullish bias, with gold poised to test the first key resistance at $1712.00. If this resistance is overcome, it will push gold higher, with first target at $1,725.00 / oz and higher target at $1,740.00 / oz.

On March 6, President Joe Biden said Americans will start receiving their stimulus checks this month. “When we took office 45 days ago, I promised the American people that help was on the way,” he said. Today, I can say that we have taken another big step forward in delivering on the ongoing promises of aid. And it will start sending checks this month to those Americans who desperately need help.”

Senate Majority Leader Chuck Schumer said congressional Democrats could consider more stimulus after the Senate passed the $1.9 trillion Novel Coronavirus rescue plan, depending on how the economy and pandemic unfold in the coming months.

Many Republicans oppose the current bill, citing recent signs of recovery in the U.S. economy, including Friday’s stronger-than-expected February jobs report. “This is not a pandemic rescue plan,” said Senate Minority Leader Mitch McConnell. It’s a parade of left-wing pet projects that they force their way through during a pandemic.”

The House of Representatives will hold a procedural vote on Tuesday to vote on the latest version passed by the Senate. The bill would then go to Mr. Biden for signature, expected before a March 14 deadline when increased federal unemployment benefits expire. With Democrats in control of the House of Representatives, passage is seen as a foregone conclusion.

The Bureau of Labor Statistics said on Friday that nonfarm payrolls rose by 379,000 last month, compared with expectations for a gain of about 198,000 jobs in February. Meanwhile, the U.S. unemployment rate fell to 6.2 percent in February from 6.3 percent the previous month. The strong economic data sent the yield on the benchmark 10-year Treasury note higher.

Singapore bank chief economist Mansoor Mohi uddin – said that despite the distance the stimulus bill into law is still one step away, but the financial markets on Monday will only focus on the senate by $1.9 trillion to stimulate the news, the huge stimulus did not shrink as expected before, so could yield facing upward pressure.

At one point in early Asian trading on Monday, the yield on the 10-year Treasury note broke through 1.6% again, near its highest level since February 2020.

“Wherever yields top, it’s going to be a floor for gold,” said Phillip Streble, chief market strategist at Blue Line Futures.

In a speech at The Wall Street Journal jobs summit on Thursday, Federal Reserve Chairman Colin Powell dismissed the recent surge in Treasury yields, which some market analysts say have room to rise as the economy improves.

‘Powell’s comments mean bond yields could continue to rise unchecked, which will continue to weigh on gold,’ said Darrin Newsom, president of Darin Newsom Analysis.

TD Securities strategists say gold is looking for a bottom, but that will only happen if the US central bank takes convincing action to stop interest rates rising.

Bart Melek, head of commodity strategy at TD Securities, said: “The 10-year yield is rising, the dollar is rising and risk appetite is back on the rise. So these are all very bad factors for gold.”

“As the outlook continues to improve, you’re likely to see a lot of optimism,” said Edward Moya, senior market analyst at OANDA. We’re going to start to see Texas open again, and that’s going to be very positive for the labor market and economic activity. There is strong upside in economic data. That will push yields higher.”

The dollar regained momentum, Treasury yields rose and investor optimism about U.S. economic growth weighed on the gold market, with sentiment remaining firmly bearish, according to Kitco’s gold survey released on Friday.

A total of 13 market professionals took part in Kitco’s Wall Street survey last week. Four of the analysts, or 29%, said they were bullish on gold this week. Eight analysts, or 57 percent, were bearish. Two analysts (14 percent) are neutral on gold.

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