Gold ticked higher this morning while the dollar fell after the House of Representatives voted in favor of the higher stimulus check amount requested by President Donald Trump. He asked Congress to increase the amount of the stimulus checks going to Americans from the $600 previously approved by lawmakers to $2,000.
All About Stimulus For Gold
In an email, Edward Moya of OANDA said gold is trying to hold onto recent gains while the dollar is weakening.
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"It is all about stimulus for gold, and right now, the uncertainty remains as to when will we see more," he said. "President Trump's push to increase stimulus checks to $2,000 may die at the Senate, but it has helped the Biden administration find out which lawmakers are willing to work with him. The prospects of more stimulus seem likely; investors will just have to wait until Biden takes office. Gold prices appear poised to consolidate this week as the shortened trading week will be accompanied with thin liquidity."
According to Bloomberg, gold is on track for its first monthly gain in five months. Investors have been optimistic about the coronavirus vaccines, which has led to a renewal of inflation bets and dollar weakness. Disruption in the global economy and soaring stimulus spending around the globe helped boost gold prices toward their best year in a decade.
Stocks Open At New Highs
Gold isn't the only asset driven higher by investors' hopes for increased stimulus checks. Stocks opened at record highs for the second consecutive day this morning. The Dow Jones Industrial Average initially gained 131 points before slipping into the red. The S&P 500 remains in the green with a minuscule gain after opening at a new high. The Nasdaq Composite also started higher before slipping into the red. All three indices closed at record highs on Monday.
Stocks were driven higher on Monday after the House voted in favor of Trump's suggestion to raise the stimulus payments to $2,000, but today it remains unclear whether the measure will pass the Senate. Republican senators have repeatedly refused to agree to stimulus payments higher than $600. However, Sen. Bernie Sanders said if the Senate doesn't make time to vote on the measure to increase those payments, he will start a filibuster on the vote on the defense spending bill Republicans want to override Trump's veto.