Prices for the precious metal, GOLD, closed at 1,864.46, after placing a high of 1,865.70, and a low of 1,844.74. The GOLD prices settled higher on Wednesday, as investors waited to see if US lawmakers would finally release a coronavirus fiscal relief package through Congress after months of pledges and failed negotiations.

On Tuesday, talks started between House Speaker Nancy Pelosi and Senate Majority Leader Mitch McConnell, and their respective seconds in command, Chuck Schumer and Kevin McCarthy. The rising expectations for more support for the US economy and a dovish stance from the US Federal Reserve provided counterpressure to the optimism over coronavirus vaccines.

The leading US lawmakers reported progress in levelling out the coronavirus relief aid, as pressure mounted amid the rise in the numbers of coronavirus cases in the world’s hardest-hit country. The market was moving between the optimism surrounding vaccine developments and concerns around rising infection rates—these dovish expectations from FOMC and the weak dollar added to the gains in GOLD prices on Wednesday. The lawmakers in Congress are moving closer to a $ 900 Billion coronavirus aid bill, which would include $ 600 to $ 700 stimulus checks and unemployment benefits.

The Chairman of the Federal Reserve, Jerome Powell, said on Wednesday that despite the positive news of vaccines, the rise in infections was worrying, and he also warned that the next few months would be more challenging for the economy. Powell reiterated that everyone could help get the economy back to full strength by following the advice of public health officials, by wearing masks and social distancing.

On Wednesday the Federal Reserve left its benchmark interest rate unchanged at near zero, which was widely expected. The Fed has already said that interest rates will remain low until inflation gets back to its target of 2%, because the priority of the Fed was to get Americans back to work and keep prices pressures in check.

Although the Fed kept the interest rates unchanged, the central bank pledged to shore up the US economy with its enormous bond-buying program, purchasing at least $ 120 B in US treasuries and mortgage-backed securities each month, until progress is made on the employment and inflation goals. These statements kept the US dollar under pressure and pushed GOLD prices higher.

Meanwhile, on the data front, at 18:30 GMT, the Core Retail Sales for November came in, showing a drop to -0.9%, against the forecasted 0.1%, weighing on the US dollar and supporting gold gains. The Retail Sales for November also dropped, coming in at -1.1%, against the projected -0.3%, and putting pressure on the greenback, whilst adding to the gains in the precious metal. At 19:45 GMT, the Flash manufacturing PMI for December indicated a rise to 56.5, against the expected 55.9, lending support to the US dollar.

The Flash Services PMI for December dropped to 55.3, against the expectations of 55.7, putting pressure on the US dollar and resulting in additional gains for gold. At 20:00 GMT, the Business Inventories for October showed an increase to 0.7%, against the projected 0.6%, pushing the US dollar down and boosting gold. The NAHB Housing Market Index also dropped, coming in at 86 against the forecasted 88, likewise putting pressure on the US dollar and pushing the gold prices up on Wednesday.

Furthermore, the market sentiment was supported by the news that Moderna’s coronavirus vaccine is expected to receive regulatory authorization this week. It will come hot on the heels of Pfizer’s drug, which received approval last week and is currently being rolled out to the population.