Trump signs off on government funding and Covid-19 fiscal stimulus bill | The Gold Forecast

Trump signs off on government funding and Covid-19 fiscal stimulus bill

December 28, 2020 - 6:16pm

 by Gary Wagner

On Sunday President Trump signed off on the legislation to fund the government avoiding a shutdown that would have begun on Tuesday, coupled with a fiscal stimulus aid package. Collectively the expenditures contained in this bill amount to $2.3 trillion, of which $900 billion is allocated to fund the second stimulus package, and the remaining $1.4 trillion to be allocated to fund the government budget.

According to CNN, “Congressional leaders announced Sunday night that they have secured a deal for a sweeping $900 billion rescue package to deliver much-needed relief for small businesses, unemployed Americans and health care workers while bolstering vaccine distribution.”

McConnell’s statement was followed by a joint statement from Speaker of the House Nancy Pelosi and Senator minority leader Chuck Schumer which said, “We are going to crush the virus and put money in the pockets of the American people.”

The fiscal relief package will fund automatic payments of up to $600 per adult. It will also provide direct aid for small businesses that have been struggling by allocating roughly $284 billion through the paycheck protection program. It will extend the enhanced unemployment benefits of an additional $300 per week for unemployed Americans. As well as allocate $25 billion for rental assistance and extend the eviction moratorium.

This additional aid will also include help for the educational system providing $82 billion worth of funding to help reopen classrooms safely. It will fund $10 billion of aid to assist with childcare needs and $13 billion for the supplemental nutrition assistance program and child nutrition benefits. Additionally, the stimulus package will allocate billions of dollars to pay for the vaccine distribution, testing, and contact tracing efforts.

This announcement sparked a rally in U.S. equities taking the Dow, S&P 500, and NASDAQ Composite to new record highs. It was highly supportive of silver pricing which gained over 2% on the day. However, it had a negative impact on gold pricing.

In trading overseas last night gold futures basis the most active February 2021 contract broke above $1,900, trading to a high of $1,904 before correcting. As of 4:00 PM EST gold futures are currently fixed at $1,876.70 which is a net decline of $6.30. As we enter the last trading week of the year attention to the solid gains in U.S. equities limited any sustainable gains in gold which could have kept pricing above $1900 per ounce. The dollar closed, in essence, unchanged, and is currently fixed at 90.28, which is an increase of 0.03%.

Silver futures basis the most active March 2021 Comex contract gained $0.53 (+2.07%) taking silver to $26.445 per ounce. Overall precious metals price changes today were muted by a phenomenal upside jump in bitcoin and bitcoin futures pricing. Currently, the most active January 2021 bitcoin contract which is traded on the Chicago Mercantile exchange gained $3,425, which is a net gain of 14.46%, making a single Bitcoin now worth around $27,000.

Wishing you as always, good trading and good health,

Gary S. Wagner - Executive Producer

This report is now free and publicly available to everyone

Gold Forecast: Proper Action

On December 27th we sent a trade alert to buy gold and silver.

Buy February gold @the market (current $1890.00) place stop @ $1860
Buy Forex gold @the market (current $1886.00) place stop @ $1856
Buy March silver @the market (current $26.31) place stop @ $25.25
Buy GLD MOO (Market on open $177.26) place stop @ $174.77
Buy SLV MOO (Market on open $24.67) place stop @ 23.41

long February Gold Futures at $1860-$1866 and stop hit at at $1869. Average profit $600 per contract
long XAUUSD at $1856-$1862 and stop hit at $1866. Average profit $6
long March Silver Futures at $25.16 - $25.25 and stop hit at $25.30. Average profit $450 per contract
long GLD @ $174.12 and stop hit at $175.78 for a profit of $1.66 per share
long GLD @ $174.12 and stop hit at $175.78 for a profit of $1.66 per share
long February Gold Futures at $1830 -$1843 and out at $1850 for a profit of $700 to $2000.00 per contract
long XAUUSD at $1841 and out at $1850 for a profit of $90.00 per mini 10 oz contract
long March Silver Futures at $24.29 and out @ $24.40 for a profit of $550.00 per comex contract
long GLD @ 1$71.50 and out @ $173.00 for a profit of $1.50 per share
long SLV @ $22.30 and out @ $22.50 for a profit of $0.20 per share
Long December gold at $1899. Stop hit at $1918, for a $1900 profit
Long forex gold at $1896.00. Stop hit at $1912, for a $1600 profit
Long December silver at $24.21. Stop hit at $25.07 for a $4300 profit
Long GLD at $180.46 and stop hit at $176.42 for a loss of $4.04 per share
Long SLV at $23.23 and stop at $22.78 for a loss of $0.40 per share
Long December Gold Futures at $1926 and stop hit at $1907.30 for a loss of $18.70 per ounce
Long Forex Gold at $1922 and stop hit at $1903 for a loss of $19.00 per ounce
Long December Silver Futures at $25.13 and stop hit at $24.73 for a loss of $0.40 per ounce
Long December gold at $1890, out at $1909.30 for a profit of $1,930.00
Long December silver at $23.95, out at $24.50 for a profit of $2,750.00
Long Forex gold at $1883.68, out $1907 for a profit of $23.32 per ounce
Long GLD ETF at $178.03, out at $179.80 for a profit of $1.77 per share
Long SLV ETF at $22.66, out at $22.03 for a loss of $0.63 per share
Long December Silver (SI Z20) @ $27.07 - Stop hit @ 25.56 for a loss of $1.51 per ounce
Long GLD @ $183.91- stop hit @ $178.50 for a loss of $5.41 per share
Long SLV @ $ 26.33 - stop hit @ $23.53 for a loss of $2.80 per share
Long December gold (GC Z20) @ $1947.00 - Stop hit @ $1952 for a profit of $500.00 per contract
Long Forex gold (XAU A0-FX) @ $1939.00 - Stop hit @ $1944.80 for a profit of $5.80 per ounce
Long December gold @ $1956.50.Stop hit @ $1960 for a profit of $350.00 per contract
Long December silver @ $27.39.Stop hit @ $27.80 for a profit of $2050 per contract
Long forex gold @ $1948.55.Stop hit @ $1955 for a profit of $6.45 per ounce
Long GLD @ $183.57.Stop hit @ $184.36 for a profit of .79 per share
Long SLV @ $25.10.Stop hit @ $25.75 for a profit of .65 per share
Long September silver at $26.68. Our stop was hit @ $26.87 for a profit of $1000 per contract.
Long December Gold at $1955.50. Our stop was hit @ $1979 for a profit of $2350 per contract
Long Forex Gold at $1947. Our stop was hit @ $1967,52 for a profit of $20.52 per Ounce
Long September silver at $24.40. Our stop was hit @ $25.99 for a profit of $7950 per contract
Bought GLD @ $166.74. Our stop was hit @ $$183.00 for a profit of $16.87 per share.
Bought SLV @ $18.00 Our stop was hit @ $23.80 for a profit of $5.80 per share.
NUGT – we sold all shares and took profits of $33.19 per share
Long December gold at $1997, we covered the trade @ $2035 for a profit of $3800 per contract
Long Forex gold at $1977, we covered the trade @ $2017 for a profit of $40.00 per ounce

Gold Market Forecast

With the fiscal stimulus aid package which was bundled with a funding bill to keep the government open signed off yesterday by President Trump, it now has full support from the Senate, House and administration. That being said we saw gold move from approximately $1885 up to $1904 immediately following the release that President Trump had signed off on the legislation. However, that price point was unsustainable as gold back down and closed below 1900.

Silver however was able to take advantage of the safe haven aspect but more importantly of its intrinsic use in industry gaining almost 2% in trading today. While I am bullish both gold and silver it seems gold for the moment might have a steeper hill decline to gain value throughout the remainder of this week and trading year.

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