Gold Rises On Firmer Relief News

Gold Rises On Firmer Relief News

Gold rises as headlines reveal firmer COVID relief news. A meeting between House Speaker Nancy Pelosi, Senate Democratic leader Chuck Schumer, Senate Majority Leader Mitch McConnell and House Republican leader Kevin McCarthy this morning is expected to end with a finalized Covid-19 relief package.

The congressional leaders met several hours Tuesday night when they reportedly made real progress on a relief package worth less than $900 billion that includes direct stimulus payments but leaves out state and local aid, according to a person familiar with negotiations.

Gold rose to the highest level in more than a week early Wednesday as investors awaited the Federal Reserve’s last policy announcement of the year later in the day and anticipated bullish news about stimulus measures. The yellow metal then retreated after the U.S. Commerce Department reported retail sales dropped for a second straight month in November. The 1.1% drop adds to growing signs of a slowdown in the economy’s recovery from the pandemic recession.

The Fed is expected to keep interest rates unchanged near zero but provide signals on where policymakers plan to set rates in the coming year and beyond. Low interest rates have historically been considered bullish for gold.

Front-month gold futures rose 1.3 Tuesday to settle at $1,855.30 an ounce on Comex. The February contract advanced 0.6% in the first two days of the week. Gold is up more than $300 — or 22% — so far this year as investors have flocked to the metal because of uncertainty from the coronavirus pandemic and the economy. The metal fell 5.3% in November. The February contract is currently up $6.40 an ounce to $1,861.70 and the DG spot price is $1,858.40.

Equities in Asia headed for record highs after Senate Majority Leader Mitch McConnell said he will keep lawmakers in Washington until a stimulus deal gets done.

McConnell also split with President Donald Trump on Tuesday by recognizing Joe Biden as president-elect, attempting to quash efforts to further question the results of the presidential election in November.

In other bullish news, a coronavirus vaccine by Moderna is likely to get emergency authorization before the end of the week after data released Tuesday indicated it’s highly protective. The approval, expected Friday, would put a second vaccine in the U.S. market, potentially hastening the end of the pandemic. A Pfizer vaccine was approved last week.

The COVID-19 virus has killed more than 1.63 million people worldwide and sickened more than 73.4 million. About 23% of the cases — and 19% of the deaths — are in the U.S. The country has about 16.7 million cases, more than any other nation.

Front-month silver futures rose 2.5% Tuesday to settle at $24.64 an ounce on Comex, and the March contract advanced 2.3% in the first two days of the week. The March contract is currently up over $0.50 to $25.195 and the DG spot price is $25.05.

Spot palladium gained 0.4% Tuesday to $2,330.50 an ounce and is down 0.2% so far this week. It advanced 8.3% in November. The DG spot price for palladium is currently up to $2,334.50.

Spot platinum advanced 2.5% Tuesday to $1,040.10 an ounce and is up 1.9% this week. It rose 14% in November. The DG spot price for platinum is currently up to $1.042.80.


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