A meeting of the minds; can a stimulus bill be passed before the election? | The Gold Forecast

A meeting of the minds; can a stimulus bill be passed before the election?

October 21, 2020 - 8:09pm

 by Gary Wagner

On Monday Speaker of the House Nancy Pelosi said that there is only a 48-hour window to come to an agreement, or understanding, to wright and pass a fiscal stimulus bill before the presidential election which is now less than two weeks away. Yesterday House Speaker Pelosi said that she “is hopeful for a stimulus agreement this week”.

If the different bodies of government cannot come to an agreement prior to December 31st the consequences could be devastating to millions of Americans who are in great need of financial assistance. On December 31st a large portion of the temporary financial aid is set to expire and would lead to millions of Americans not receiving unemployment benefits. It is these unemployment benefits that have kept the millions of  Americans who lost their jobs due to Covid-19 afloat allowing them to pay their rent as well as other financial obligations.

It would also affect the millions of unemployed Americans who currently have a mortgage. In September the U.S. centers for Disease Control and Prevention enacted an eviction moratorium which is set to expire on the last day of 2020. Without additional legislation renters and mortgage holders could face eviction or foreclosure beginning in January 2021. Those mortgage holders that have loans by either the FHA, the VA, Fannie Mae or Freddie Mac have additional security under the “Cares Act” that was passed in March can request up to a year’ worth of forbearance.

In an article by MarketWatch Jack Gillis, Executive Director of the Consumer Federation of America said, “It is daunting to think about what the consequences will be for families, individuals, businesses, our economy when the COVID-19 protections and financial assistance are no longer available.”

Although no formal agreement has been reached, the consequences of inaction would be unforgivable, which has led to optimism that some agreement on a fiscal stimulus package will be forthcoming prior to the presidential election. This optimism has dramatically influenced market sentiment on the safe-haven assets specifically gold and silver taking them dramatically higher this week, and pressured the U.S. dollar resulting in a steep decline.

As of 4:15 PM EST gold futures basis the most active December 2020 Comex contract is currently fixed at $1927.70 which is a net gain of $12.30 (+0.64%) on the day. December silver futures are currently trading at $25.18 after gaining 8/10 of a percent in trading today.  The dollar index which traded to a high of 94.80 at the end of September is currently fixed at 92.625. The dollar has lost almost 2% in value over the last month.

Wishing you as always, good trading and good health,

Gary S. Wagner - Executive Producer

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Gold Forecast: Proper Action

Today October 21 we sent out a Trade Alert:

  • Buy December Gold Futures at the market (currently trading at $1925) and placed a protective stop at $1907.30
  • Buy Forex Gold at the market (currently trading at $1922) and placed a protective stop at $1903
  • Buy December Silver Futures at the market (currently at $25.13) and place protective stop at $24.73
  • Buy GLD at the market (currently at $180.46) and place a protective stop at $173.50
  • Buy SLV at the market (currently at $23.23) and place a protective stop at $20.33

Maintain all trades and stops


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

Although today’s trade alert was technically based, the fundamentals behind a possible upside move in gold are strong with one caveat; they are completely headline driven and based upon whether or not the House, Senate and president can come to a compromise and agreement on a fiscal stimulus bill.

Currently the president’s recommendation along with the House of Representatives are much closer than Mitch McConnell and the Senate. Expect increased volatility over the next few days.

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