Spot gold edged higher above the key 1900 level in Asian trading on Monday, while silver edged higher on fresh news about the US stimulus package.
Gold’s recent moves have been particularly sensitive to U.S. stimulus news, which pushed the price past 1900 as Pelosi issued an ultimatum on stimulus negotiations and Trump signaled his willingness to offer a bigger stimulus, seen by the market as a sign of progress.
House Speaker Nancy Pelosi has given the White House until Tuesday local time to reach an agreement on a new stimulus package ahead of the November 3 election. She and Treasury Secretary Mnuchin will renegotiate the roughly $2 trillion stimulus deal on Monday in an effort to iron out differences.
House Speaker Nancy Pelosi has given the White House a 48-hour deadline to complete a coronavirus stimulus deal, her top aide said on Twitter Saturday night.
Drew Hammill, Pelosi’s deputy chief of staff, tweeted that the speaker and Treasury Secretary Steven Mnuchin spoke by phone for more than an hour on Saturday night. He said the agreement must be “resolved in a comprehensive manner within the next 48 hours.”
Pelosi told ABC’s “This Week” that the 48-hour deadline applies to whether the coronavirus stimulus deal can be completed before the election. “These 48 hours are only about whether we want to reach an agreement before the election, which we do want to do. I’m optimistic because we’re going back and forth on this issue.”
Asked by George Stephanopoulos whether Americans would “get relief before election day,” Pelosi replied, “It’s up to the administration.”
Hammill said on Twitter that Pelosi and Mnuchin’s meeting on Saturday produced “some encouraging news regarding the corona-test.” But he added, “There is still work to be done to ensure that there is a comprehensive testing program that includes contact tracing and additional measures to address the disproportionate impact of the virus on communities of color.”
President Trump has encouraged a deal before the election, suggesting that Mr. Mnuchin should go beyond the current $1.8 trillion proposal, despite opposition from Republican senators over costs.
Earlier Saturday, Mr. Trump said in a telephone interview that he was confident that he could “very quickly convince” Republicans to support a “good” deal. “Whether it’s $1.8 trillion, $2 trillion or even $2.2 trillion, I’d like to offer a bigger stimulus right now,” Trump said.
Senate Majority Leader Mitch McConnell has said he will not bring a $1.8 trillion deal to the Senate, but the senate plans to vote this week on a $500 billion bill that would extend the payroll protection program and expand unemployment benefits. However, Democrats are expected to block the bill, seeking a broader bailout package that Ms Pelosi and Mr Mnuchin have been negotiating for months.
“Both gold and stocks are addicted to the stimulus plan,” Kevin Grady, President of Phoenix Futures and Options, told Kitco News on Friday. From the negotiating point of view, any words are directly related to stocks and gold. That’s why gold is in a stable mode.”
Grady explained that gold price moves are directly related to stimulus measures because gold is driven by inflation. ‘The more the government prints money, the more the dollar depreciates,’ he added. “They have devalued the currency, which has pushed up gold. Even Bitcoin will begin to be an alternative investment. The dollar is the world’s reserve currency and a weaker dollar would boost gold.”
Afshin Nabavi, senior vice President of precious metals traders at MKS SA, said gold is likely to stay in the $1880 to $1930 range for now. “Gold follows the dollar and equities. On the upside, we have to break through $1,925, and on the downside, solid support at $1,880. “Sentiment is more bullish for metals.”
On the daily chart, the dollar index is near 93.75 maintain sideways pattern, waiting for Powell, chairman of the federal reserve to talk today. The daily chart MACD green momentum column gradually contracted, and the KDJ random index rebounded above the oversold level of 50, indicating that short-term bearish momentum weakened, and there is still room for a rebound.
The 4-hour chart shows the USD index moving around its 100-period moving average, waiting for further direction. The MACD red momentum column gradually weakened and nearly disappeared, while the KDJ random index held steady near the 50 level, indicating a slowdown in bullish momentum for the DOLLAR, short term or further volatility.
On daily charts, gold continues to hover around the $1,900 mark with no clear signal of a breakout. The daily chart MACD red momentum column is weak, with the KDJ random index holding steady near the 50 level, indicating that gold bullish momentum is not strong and is now inclined to consolidate.
2 hours on the chart, the trend of gold shock, above the 200 period averages constitute a significant repression. The MACD red kinetic energy column gradually weakens and almost disappears, and the KDJ random index falls below the 50 level, indicating that the bullish momentum of gold further weakens, and the short-term or volatile downward trend.
On the daily chart, silver continued its narrow, choppy pattern of previous days and is trading around $24.15. The daily MACD red column is very weak, with the KDJ stochastic trying to break below the 50 level, indicating a lack of bullish momentum or further choppy downside for silver.
On the 2-hour chart, silver has been wrapped around its 50-hour average and is now trading above $24 again. The MACD red column is very weak, and the KDJ random index has fallen sharply to near the 50 level, indicating weak bullish momentum for silver and short term or further weakness.
Fundamentals positive factors:
- The Leader of the Democratic Party In the United States Nancy Pelosi says a phone call with the Treasury Secretary Steven Mnuchin over the weekend made good progress. She was upbeat about the prospects for the talks and set Tuesday as a deadline for a deal on the rescue package before November’s presidential elections. Markets saw it as a sign of progress. — Positive developments in the stimulus package are positive for gold.
- Recently, European countries located in the Northern Hemisphere are facing severe pressure of epidemic prevention and control again. France has declared a public health emergency. A one-month curfew in nine major cities will affect nearly a third of the population. London is about to enter a second lockdown; Germany has introduced rules to try to reduce infection rates. — Risk aversion triggered by the renewed outbreak in Europe is bullish for gold.
- U.S. President Donald Trump said on Thursday that he had agreed to seek a coVID-19 stimulus package larger than the $1.8 trillion proposed by the White House in order to reach a deal with House Democrats. — Greater stimulus is good for gold.
- New claims for state unemployment benefits rose to 898,000 last week, up 53,000 from the previous week and above expectations of 825,000, adding to fears the economic recovery is stalling and helping gold.
Fundamentals negative factors:
1.Senate Majority Leader Mitch McConnell said Saturday that a vote on the smaller $500 billion stimulus bill would be held on The 20th and 21st, with a separate vote on the Pay Protection Plan bill to bail out small and micro-businesses. Smaller stimulus packages are bad for gold.
- McConnell on Thursday rejected more than $1.8 trillion in stimulus proposals, saying a smaller $500 billion plan was an appropriate response to the outbreak. The $500 billion stimulus package fell far short of market expectations, putting gold in the black.
- The US Treasury Secretary has acknowledged that it will be difficult to reach an agreement on a stimulus package before the election. Mr. Mnuchin said there were still differences in negotiations between the two parties over a new rescue package and there was still no agreement on the amount of money to be spent. – The scale of stimulus has delayed the launch of negative gold.