Good morning traders,

Prices for the precious metal, GOLD, closed at 1,853.16, after placing a high of 1,855.29, and a low of 1,818.78. GOLD prices rose by more than $20 an ounce on Tuesday, ahead of the Federal Reserve meeting on Wednesday. Lawmakers also made another move, on Tuesday, to try and get coronavirus bill relief through Congress, after multiple failed attempts.

The rising hopes that the Federal Market Open Committee will quit playing with the monetary policy before the end of the year pushed up the prices for the yellow metal and kept them supported, as they rallied over these speculations.

In their December meeting, interest rate cuts by the Federal Reserve are highly unlikely, as the benchmark rate of the central bank is already near zero. However, the expectations for expansion in bond buying from the Fed, by $ 120 billion a month, through quantitative easing, are high. These expectations also played an important role in lifting the yellow metal prices on Tuesday.

The rise in GOLD prices on Tuesday could also be attributed to the latest meeting called by House Speaker Nancy Pelosi, with fellow congressional leaders, to try and reach an agreement over the funds that should be released to send out another round of the coronavirus relief package.

Senate Majority Leader Mitch McConnell, House Minority Leader Kevin McCarthy and Senate Minority Leader Chuck Schumer were also invited to attend the meeting, as Congress is running out of time if they want to avoid a government shutdown and send another round of stimulus out to the Americans.

CNBC reported on the meeting, saying that it would mark the most significant effort yet for the four leaders to come to a bipartisan agreement on a package that would be approved by a divided Congress.

Meanwhile on the data front, at 18:30 GMT, the Empire State Manufacturing Index for December dropped to 4.9 against the expected 6.3, weighing on the US dollar and adding further gains to the GOLD prices.

The US Import Prices in November declined to 0.1%, against the forecasted 0.3%, putting pressure on the US dollar and supporting the upward momentum in GOLD. At 19:15 GMT, the Capacity Utilization Rate from the US for November came in at 73.3%, against the expected 73.1%, supporting the US dollar. The Industrial Production for November also went up, rising to 0.4% against the expected 0.3%, boosting the US dollar and capping any further gains in GOLD prices.

The gains in GOLD could also be attributed to the rising numbers of coronavirus cases from across the globe, which has forced many nations to impose lockdown restrictions, including the Netherlands and Germany, and some areas in the US and the UK, like New York and London. The fresh global restrictions due to an increased number of infections also turned the focus towards the US Federal Reserve’s policy meeting, as market expectations for additional monetary and fiscal stimulus rose on Tuesday.