Rejected "Skinny" Bill Drags Gold Down

WikiFX News (23 Oct.) - Recently, gold prices once fell to $1,910 after hearing the Senate rejected another $500 billion Republican stimulus bill.

Regarded as a “skinny” version, the bill is a far cry from the previous $2.2 trillion proposal. The bill ran into opposition from almost all Democrats who argued that it did little to address the economic devastation of the pandemic.

The White House is seeking a bigger stimulus package ($1.9 trillion) while complaining about the lack of cooperation from the Senate. With the election less than two weeks away, uncertainty remains over whether it is possible to pass a relief bill that satisfies all sides.

A new economic stimulus package will be passed sooner or later, but it can hardly hamper the dollar further due to the lack of stimulus that has been consumed in the months of negotiations. With that said, the greenback is expected to edge up amid easing pressures on the European Central Bank.

On Thursday, gold prices failed to break the topside resistance at $1,932/oz but fell below the support at $1,915/oz. A deepened loss to $1,900 or even $1,882 may await in future trading.

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Chart: Trend comparison between Gold and USD