Hurdles and compromises remain despite signs of progress

According to an article penned by Sarah Hansen of Forbes, magazine lawmakers have entered a critical week to reach an agreement, “on another federal coronavirus aid bill, just one in four congressional staffers believe new stimulus legislation can pass before President-elect Joe Biden takes office in January, according to a new Capitol Insiders Survey from CQ Roll Call.”

This assumption is the result of a Forbes poll, in which they asked 96 aides, with 45 aides who identified themselves as Republicans, and 51 aides who identified themselves as Democrats, and one aid as an independent. The poll led to the following key facts; 44% of the respondents said that they did not believe that lawmakers will be able to pass any more relief at all, with the remaining 56% unsure as to whether or not lawmakers would be able to agree and pass a fiscal stimulus bill before the end of this year.

The aides based their opinion and pessimism regarding the fundamental differences in how Republicans and Democrats currently view the crisis.

“a majority of Republican respondents said that Congress has been effective in fighting the virus and its economic impact, while Democrats were much more negative about the federal government’s response.”

One obstacle to passing a fiscal stimulus bill results from the fact that the leadership of both parties while in agreement that a new stimulus package should be attached to an omnibus spending bill that would fund the government through the 2021 fiscal year, was that lawmakers are now expected to pass a short-term continuing resolution as a stopgap to avert a government shutdown before the December 11 deadline. this according to Bloomberg news.

An article released today by Forbes cited that there were 27 coronavirus relief programs that will expire at the end of the year if Congress is not able to pass legislation extending them.

The Washington Post reported that Maya MacGuineas president of the committee for a responsible federal budget said that, “It would be blatant neglect to allow all these things to expire”

Nonetheless with all of the complications currently facing the passage of a bipartisan proposal that was introduced last week which would allocate $908 billion for a fiscal stimulus framework in efforts to reignite negotiations that have been at an impasse for the last couple of months.

That being said traders and market participants continued to be optimistic that some relief package will be enacted before the end of the year. This was cited as a major component to gold’s strong gains today in which Gold futures basis the most active February 2021 contract gained approximately $24 closing at $1868 per ounce.

While there remains disagreement as to how much capital is needed to expand on a fiscal stimulus aid package there is a bipartisan agreement that aid is needed, and needed sooner than later. That at least increases the probability that some compromise might be reached before the end of the year. If so, we would expect gold prices to continue to gain value.

Wishing you as always, good trading and good health,