Good morning traders,

The GOLD prices closed at 1,839.75, after placing a high of 1,843.92, and a low of 1,823.70. GOLD prices rose for the third consecutive session on Thursday, on the back of the weakness of the broad-based US dollar, due to the rising hopes for the second round of stimulus from Congress.

On Wednesday, House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer urged the Senate Majority Leader, Mitch McConnell, to use a $ 908 billion partisan coronavirus stimulus plan as the basis for relief talks, as Congress struggles to pass a bill to provide financial aid to Americans before the end of the year.

Democrats in California and New York insisted on a bill worth at least $ 2.2 trillion, which means that the Democrats are endorsing a narrower approach towards aid than they did previously. However, McConnell quickly shot down the bipartisan plan, after it was released, only supporting about $ 500 billion for the new package.

Both parties agree that the aid legislation should be passed before the end of 2020, but they have fundamentally different views about the methods and the health care system. The renewed efforts to strike a deal follow a deadlock over the second stimulus relief package, that has lasted many months.

The optimism surrounding the stimulus deal and progress over the coronavirus vaccines have kept the US Dollar Index near its lowest level in more than two years, and this boosted the investor demand for the safe-haven yellow metal on Thursday.

GOLD is considered a hedge against inflation and currency debasement, and it has risen more than 21% this year. Gold has benefitted from near-zero interest rates and the risk of higher inflation, which is likely to result from massive stimulus measures globally, in order to curb the effects the pandemic has had on the economy.

On the data front, at 17:30 GMT, the Challenger Job Cuts for the year in November came in at 45.4%, against the previous 0.4%. At 18:30 GMT, the Unemployment Claims from last week showed a drop to 712K, against the projected 775K, boosting the US dollar and capping further gains in the GOLD prices. At 19:45 GMT, the Final Services PMI for November came in, indicating a rise to 58.4, against the expected 57.5, also supporting the greenback. At 20:00 GMT, the ISM Services PMI figures were released – they stayed at 55.9, as expected.

The Fed and the ECB are set to provide stimulus support to their economies, and this has been pushing GOLD up, but to rise further, GOLD will need the lawmakers in DC to deliver at least $ 500 billion in financial aid before the holidays. The key to Congress reaching a deal on a stimulus package could be assured after the release of tomorrow’s Non-Farm Payroll report.