Gold traders got the shock of their lives yesterday after President Trump suspended the U.S stimulus deal with the Democrats. The precious metal retreated immensely from the two-week high that it finished with some days ago.
At the time this report was written, gold futures prices were trading at around $1887.20/ounce losing over 1%.
President Trump disclosed via his Twitter handle on Tuesday:
“Nancy Pelosi is asking for $2.4 Trillion Dollars to bail out poorly run, high crime, Democrat States, money that is in no way related to COVID-19. We made a very generous offer of $1.6 Trillion Dollars and, as usual, she is not negotiating in good faith.
“I am rejecting their request and looking to the future of our Country. I have instructed my representatives to stop negotiating until after the election when, immediately after I win, we will pass a major Stimulus Bill that focuses on hardworking Americans and Small Business.”
Nancy Pelosi is asking for $2.4 Trillion Dollars to bailout poorly run, high crime, Democrat States, money that is in no way related to COVID-19. We made a very generous offer of $1.6 Trillion Dollars and, as usual, she is not negotiating in good faith. I am rejecting their…
— Donald J. Trump (@realDonaldTrump) October 6, 2020
In an explanatory note to Nairametrics, Stephen Innes, Chief Global Market Strategist at Axi, spoke on the prevailing news distorting the mind of gold traders. He said:
“President Trump pulled the stimulus rug from under the market with predictable results getting expressed in the gold market.
“Gold was already selling off after ECB President Lagarde’s dovish comments started to water down the EURUSD bullish run.
“Still, President Trump applied the salt in the gold investor’s wounds when he pinpricked the stimulus balloon that had been floating the gold market length.”
Clearly, the President is looking to turn the tables, and take back control of the election narrative by putting the ball back in the Democrats’ court with his standalone $1,200 stimulus check suggestion via Twitter.