Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Gold Rally Enters Third Day on Stimulus Chase as Dollar Wilts

Published 22/10/2020, 06:45 am
Updated 22/10/2020, 06:46 am
© Reuters.

© Reuters.

By Barani Krishnan

Investing.com - Gold rallied for a third straight day on Wednesday as the dollar tumbled and bulls in the yellow metal chased the prospects of a Covid-19 economic stimulus before the U.S. election.

U.S. gold for December delivery settled at $1,929.50, up $14.10, or 0.7%. It rose 0.4% in two previous sessions.

Spot gold, which reflects real-time trades in bullion, rose $16.89, or 0.9%, to $1,922.86 by 3:23 PM ET (19:23 GMT).
The Dollar Index, which pits the greenback against six major currencies, tumbled for a second straight day on Wednesday, losing 0.5% to hit a seven-week low of 92.46 on speculation that the White House and Congress might reach agreement on a new coronavirus relief deal. Gold is an outright hedge for any losses in the dollar.

Hopes for a stimulus deal were kept alive on Wednesday by White House Chief of Staff Mark Meadows, who said he was “very hopeful that progress is being made” in the negotiations. Meadows added that the Trump administration will continue to stay engaged in talks with House of Representatives Speaker Nancy Pelosi over the coming days.

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 President Donald Trump’s Republican party on a successive package to CARES. The dispute has basically been over the size of the next relief as thousands of Americans, particularly those in the airlines sector, risked losing their jobs without further aid.

It’s anyone’s guess if a deal could be struck before the Nov. 3 presidential election, where Trump faces Democrat challenger Joe Biden. A preliminary agreement over the stimulus could be a positive talking point in the election for Trump, who trails Biden in most polls.

Another stimulus is also critical for the economy, which may be forced into a slower and weaker recovery from the Covid-19 without more aid, Federal Reserve Governor Lael Brainard said Wednesday.

The US economy was stuck in a "slight to modest" pace of recovery in September, with the job market struggling, as businesses tried to operate amid continued impact from the pandemic, the central bank’s Beige Book report of business conditions showed.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.