By Barani Krishnan
Investing.com - Gold settled above $1,900 an ounce Thursday, returning to the comfort zone of bulls in the yellow metal, as hopes rose again that Congress might approve a Covid-19 stimulus after all before the November U.S. election.
“Gold is about to revert back to its traditional safe-haven role and could continue to rally despite disappointment in progress over a fiscal-stimulus deal,” said Ed Moya, analyst at New York’s OANDA.
U.S. gold for December delivery settled at $1,916.30 an ounce on New York’s Comex, up 20.80, or 1.1% on the day, after hitting a one-week high at $1,917.75. The gains extend the yellow metal’s dazzling run for September, where it picked up 4.2% despite volatility induced by the dollar. Comex gold also rose 5.3% for all the third quarter.
Spot gold, which reflects real-time trades in bullion, was up $19.49, or 1%, at $1,905.37 by 4:07 PM ET (20:07 GMT), after a session high earlier at $1,912.08.
The Dollar Index, or DX, which tracks the greenback’s performance versus six currencies, was off 0.2% at 93.75, extending its decline from Friday’s two-month high of 94.795.
Thursday’s rally in gold came as U.S. House Speaker Nancy Pelosi remained in talks with Treasury Secretary Steven Mnuchin for a new coronavirus relief bill although “distance” remains between the Democrats she leads and Republicans aligned to President Trump, Congress's Deputy Chief of Staff Drew Hammill said.
Earlier in the day, Pelosi told reporters that she hoped to bring to Congress a revised $2.2 trillion coronavirus relief bill if Democrats and Republicans can find common ground on tax breaks.
The House Speaker has been trying to get President Donald Trump’s Republican party to agree with the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act, which the Democrats originally proposed at $3 trillion before reducing it to $2.2 trillion and agreeing to further revisions in recent weeks.
Congress passed four packages of the Coronavirus Aid, Relief, and Economic Security (CARES) Act in the second quarter of this year, dispensing roughly $3 trillion to disburse as loans and grants to businesses, paycheck protection for workers and personal aid to qualifying US citizens and residents.
Republicans and Democrats have been locked in a stalemate since on a successive package to CARES, arguing over the size of the next relief, as thousands of Americans, particularly those in the airlines sector, risked losing their jobs without further aid. Trump, who stands for reelection in November, has accused Pelosi of playing political football over the issue. The House Speaker retorted that any deal should be to the advantage of Americans and not for Trump’s political expediency.
After months of back-and-forth, Treasury Secretary Mnuchin on Wednesday raised hopes that a deal might be forthcoming as he had been having "effective" communications with Pelosi.