By Barani Krishnan
Investing.com - Gold jumped almost 4% on the week in one of its biggest post-summer rallies as Democrat Joe Biden’s lead in the U.S. election rekindled hopes for an economic stimulus — although rivals aligned with President Donald Trump promised to fight such plans.
New York-traded gold for December delivery settled up $28.20, or 3.8%, at $1,951.70 per ounce, after hitting a six-week high of 1,961.75.
Spot gold, which reflects real-time trades in bullion, rose $4.87, or 0.3%, to $1,954.39 by 2:22 PM ET (18:22 GMT).
Biden is likely to get as many as 302 electoral college votes from Tuesday’ election, versus the minimum 270 needed for a win, after all votes are tallied across the 50 US states, both the CNN and Fox news networks reported. Trump has not conceded to Biden, alleging fraud in the election, which he said he will fight all the way to the Supreme Court.
“The COVID-19 spread across the US will force a return to lockdowns and make Congress deliver at least a $1 trillion dollars in stimulus by December,” said Ed Moya, analyst at OANDA in New York. “The stimulus trade wave won’t be as big as many anticipated but it should still help gold break the October trading range.”
Democrats, who control the House, reached agreement in March with the Trump administration and Senate Republicans to pass the Coronavirus Aid, Relief and Economic Security (CARES) stimulus. That package dispensed roughly $3 trillion as paycheck protection for workers, loans and grants for businesses and other personal aid for qualifying citizens and residents.
Since then, the two sides have been locked in a stalemate on a successive relief plan to CARES. The dispute has basically been over the size of the next stimulus as thousands of Americans, particularly those in the airlines sector, risked losing their jobs without further aid.
House Speaker and top Congressional Democrat Nancy Pelosi told reporters on Friday her next immediate priority was to cajole members of the Trump administration to resume Covid-19 stimulus talks disrupted by the election.
Democrats and existing members of the Trump administration have between now and the January 20 inauguration of the next president to hold talks in a so-called “lame duck” session.
“I'm calling on the administration to come back to the table,” Pelosi said. “Congress has committed to passing an Omnibus Appropriations bill (for the Covid-19). This is the core of our work in the lame duck, so we don't have a pandemic killing hundreds of thousands of people and infecting millions more.”
But top Senate Republican Mitch McConnell indicated that he will continue to fight Pelosi’s plans for a large stimulus. He pointed to economic statistics, including a 1% point drop in the unemployment rate, that showed a smaller stimulus package targeted at the pandemic's effects would be adequate.
"I think it reinforces the argument that I've been making for the last few months, that something smaller – rather than throwing another $3 trillion at this issue – is more appropriate," McConnell told reporters.
More than 9.6 million Americans have been infected by Covid-19, and over 233,000 have died from complications related to the virus.