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The heat is on, as lawmakers scramble to pass a relief legislation

December 3, 2020 - 7:39pm by Gary Wagner

In the words of Glenn Frey; “The heat is on … The pressure's high”

Unquestionably there is an immense amount of pressure for lawmakers to come to a understanding and pass a greatly needed fiscal stimulus package before the end of the year. It is critically important that aid is available to those 10 million American individuals who are unemployed with their benefits running out this month. Concurrently the moratorium eviction is coming to an end on December 31, unless it is extended.

These challenges are also in competition with a special budget stop gap bill to fund government service by December 11.

Statements made today by House Speaker Nancy Pelosi in conjunction with Senate Minority Leader Chuck Schumer have urged the Senate to agree upon this bipartisan proposal which contains $908 billion of fiscal stimulus. The hope is that this latest round of negotiations will lead a fiscal stimulus bill being passed and enacted by the end of the year.

The importance of passing a fiscal stimulus bill cannot be underscored. The pandemic continues to grow, which is continuing to deepen the current economic contraction. Those affected by the pandemic include both businesses as well as individuals. Currently there approximately 10 million Americans that are unemployed and require assistance in terms of unemployment benefits.

The challenge is that there is still a deep chasm between the three different proposals that are currently being reviewed. The sad truth is that many lawmakers are sticking to their partisan views. Which means that McConnell as well as Pelosi seem to be fairly dug into their current positions with very little wiggle room for compromise.

However, there is still hope. According to a report on CNBC, “Democratic House Majority Leader Steny Hoyer, D-Md., was set to speak to McConnell on Wednesday about a pandemic relief measure. Earlier, the No. 2 House Democrat told reporters he hopes the parties can strike a deal by the end of the weekend and pass it by next week.”

While House Speaker Pelosi along with Senate Minority Leader Chuck Schumer are hoping to pass the $908 billion bipartisan stimulus plan that was proposed recently. They have gone as far as urging Senate Majority Leader Mitch McConnell to endorse that stimulus plan. However, McConnell seems to be in favor of a $500 billion stimulus relief bill. Whether or not these two camps can both compromise and meet in the middle will determine the outcome.

Gold futures bases the most active February contract gained approximately $14 in trading today and as of 6:11 PM EST is fixed at $1844.50. Silver also had a respectable gain with the most active March contract currently fixed at $24.185. Both metals were aided by dollar weakness which gave up almost ½ a percent and is currently fixed at 90.685.

On a technical basis gold’s current pricing is at its first minor resistance which is $1846.50. This number is derived from the 38.2% Fibonacci retracement level which uses a data set beginning in March when gold was trading at $1450, up to the record high price achieve the first week of August at $2088. We see the next level of resistance currently fixed at gold’s 50 day moving average which is at $1883, with the 100-day moving average at $1914 being major resistance.

Our studies also indicate that there is strong support at $1807 which corresponds to gold’s 200 day moving average with major support at $1771 the 50% retracement.

While there is no certainty that lawmakers will be able to agree and enact a stimulus package before the end of the year, I remain cautiously optimistic.

Wishing you as always, good trading and good health,

Gary S. Wagner - Executive Producer

Previous Reports:

Daily Report: December 2, 2020 - 7:03pm

In the words of the famous author Mark Twain, “If you don’t read the newspaper, you’re uninformed. If you read the newspaper, you’re misinformed.” These words seem to resonate in regards to the current news about the ongoing negotiations to come up with a fiscal stimulus proposal that will be palatable to both sides of the political fence. If you have been following the current news, although you might... View report

Daily Report: December 1, 2020 - 6:08pm

In the words of the famous rock group the Rolling Stones, “You can’t always get what you want, you can’t always get what you want, but if you try sometimes, you just might find, you get what you need.” These words seem to be extremely applicable to an announcement made today that a group of moderate senators has released a new proposal that could be palatable to both political parties, and more... View report

Daily Report: November 30, 2020 - 7:01pm

It is no secret that one of the primary reasons that gold has been under so much selling pressure recently was the announcements made by three pharmaceutical companies that they had developed a vaccine for the Coronavirus. Two of which have proven to have an incredible 90-95% effectiveness. As genuine as this optimism is, the caveat is that a vaccine available to the public will not be available until... View report