Watered-down bipartisan stimulus package proposed today

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In the words of famous rock band 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 might find what you need. “
Those words seem very applicable to today’s announcement that a group of moderate senators has released a new proposal that could be acceptable to both political parties and, more importantly, passed and passed this year.

This is what so many unemployed Americans and failed businesses have been waiting for, financial support that will bridge the gap between the availability of the vaccine and the financial hardships they currently face as a result of the pandemic.

Just a few months ago, negotiations between House Speaker Nancy Pelosi and United States Secretary of the Treasury Steven Mnuchin came to a standstill over the amount allocated for this upcoming stimulus package. . It seemed unlikely that such legislation could come to fruition before the inauguration of President-elect Joe Biden.

This in light of a growing need for additional stimulus as many companies fell through such a difficult time that they filed for Chapter 11 bankruptcy, and unemployed Americans feared what would happen once. their unemployment benefits run out this month.

According to Forbes magazine, a new $ 908 billion bipartisan stimulus proposal was released today. Forbes reported that “A bipartisan group of lawmakers on Tuesday announced a new stimulus proposal in an effort to resuscitate the failed coronavirus aid talks in Washington before the end of the year, but the effort failed. will not be far without the support of the President of the Chamber, Nancy. Pelosi (D-Calif.), Who wants a massive, multi-billion dollar package, and Senate Majority Leader Mitch McConnell (R-Ky.), Who wants a narrowly focused $ 500 billion bill .

According to information published and reported by the Washington Post, the current proposal, which will likely be revised if passed, will include an additional increased weekly benefit of $ 300 for unemployed Americans for an additional four months. It would also include $ 160 billion in aid to states and local aid as well as short-term corporate liability guarantees.

While there is still a huge gap to be bridged to reach consensus on how much as well as how it is allocated, this is the first real discussion since negotiations broke down two months ago. . Other hurdles include the fact that by December 11, the executive and legislature must allocate a new budget to avoid government shutdown. In addition, the moratorium on evictions will expire on December 31. That being said, this is extremely welcome news. While any stimulus package will require major compromises to reach a bipartisan deal, the fact that a bipartisan announcement of a $ 908 billion stimulus proposal is the first step in reaching a deal and passing legislation.

The net result of this new proposal gave gold a huge boost to the upside. At 3:00 p.m. EST, the most active gold contract of February 2021 is currently trading at $ 36.80 and is currently pegged above $ 1,800, at $ 1,817.60. Gold has gained over 2% in value, this net gain has been overshadowed by silver futures gaining 6.65% trading today. The most active Comex silver contract of March 2021 is currently pegged at $ 24.10 after factoring in the current earnings of $ 1.51.

On a technical basis, two important indices can be seen in a daily candlestick chart of gold futures. First, today’s gains have moved current prices above the 200-day moving average for gold. Second, we can identify a simple two day candlestick pattern called a engulfing bull. The caveat is that it only becomes valid after the next daily candle confirms the pattern. This would consist of a large green candle, which means the market has closed above its opening price. And should also contain a higher high and a higher low than the previous candle.

We are very cautiously optimistic and sincerely hope that the two sides can come to an agreement and implement a package of much needed fiscal stimulus. Although this is the first step, we will see over the next few days how likely it is that these negotiations will result in a package that can be voted into action.

It has been said that a journey begins with one step, and today it seems that the first step has been taken.

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Wishing you, as always, good trading and good health,

Warning: The opinions expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is for informational purposes only. This is not a solicitation to effect an exchange of commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept any guilt for any loss and / or damage resulting from the use of this publication.

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