It’s a long-shot, but Senate Minority Leader Chuck Schumer, said Monday that he would try to pass the new stimulus bill in the Senate on Tuesday.
Gold futures are inching higher shortly before the regular session opening on Tuesday. The dollar-denominated asset is being underpinned by a weaker greenback, which is being pressured by the news of the approval of larger coronavirus relief checks by the Democratic-led U.S. House of Representatives, while improved risk appetite kept a lid on prices.
At 11:41 GMT, February Comex gold is trading $1883.00, up $2.60 or +0.14%.
Gold rallied early in the session on Monday after President Donald Trump signed a $900 billion coronavirus relief package into law. The measure includes a direct payment of $600 to most Americans. The signing came days after Trump demanded a $2,000 direct payment.
However, the news also lifted the major U.S. stock futures to fresh record highs, so something had to give and gold prices turned lower during the regular session because hard assets like gold usually have trouble sustaining a rally when there is demand for higher-yielding investments like stocks.
This is because gold doesn’t pay a dividend to hold it while stocks do, making them a more attractive asset. Higher Treasury yields also weighed on gold prices because the precious metal doesn’t pay interest either.
Fast-Forward to Tuesday …
Gold is holding steady on Tuesday on the hopes of additional stimulus from the government. Late Monday, the U.S. House of Representatives voted to increase the second round of federal direct payments to $2,000 as Democrats embrace President Donald Trump’s calls to put more money in Americans’ pockets. The bill now moves on to the Senate.
The House passed the payments in a fast-track procedure with just enough support to meet the two-thirds threshold needed. The chamber approved the measure in a 275-134 vote. Democrats backed the bill by a 231-2 margin. Forty-four GOP representatives supported the measure and 130 voted against it, after days of calls by the Republican Trump to increase the payments to $2,000.
The bill now moves to the Republican-led Senate, where it is expected to die. A spokesman for Senate Majority Leader Mitch McConnell, R-Ky., did not immediately respond to a request to comment on whether the chamber would vote on the House-passed bill. In a Sunday statement cheering Trump’s decision to pass the year-end legislation, McConnell did not mention any plans to vote on larger payments.
It’s a long-shot, but according to Senate Minority Leader Chuck Schumer, D-N.Y., said Monday that he would try to pass the legislation in the Senate on Tuesday. But that’s just important first step. The Democrats have to find a way to convince the Senate Republicans to come over to their side.
“Let me be clear: If Senator McConnell doesn’t agree to an up or down vote to provide the working people of our country a $2,000 direct payment, Congress will not be going home for New Year’s Eve. Let’s do our job,” he said in a statement.
If the $2000 payment is approved then look for the U.S. Dollar to plunge and for gold prices to spike higher. Today’s steady price action suggests gold traders are holding out hope that the deal will be made.