US stimulus package faces twists and turns! Gold bulls still target $1900. Historic Brexit deal reached.

This week's US fiscal stimulus plan has been a rollercoaster. Earlier this week, the US Congress passed a large-scale COVID-19 relief bill, but then US President Trump threatened not to sign the nearly $900 billion stimulus bill. On Thursday (December 24), House Republicans blocked Democrats' attempts to send Americans $2,000 checks directly, leaving the fate of the COVID-19 relief bill uncertain. However, investors still expect the economic stimulus bill to eventually become law, and gold prices remain firm, with gold bulls still targeting $1,900 per ounce in the short term. Major news also came out of Brexit. After more than nine months of protracted negotiations, the EU and the UK finally announced a post-Brexit trade deal on December 24, avoiding a "hard Brexit" on January 1. UK Prime Minister Johnson said he hopes the UK Parliament will vote on the Brexit deal on December 30.

US Fiscal Stimulus in Turmoil, Gold Bulls Remain Confident

Late on December 21, the US Congress passed a roughly $2.3 trillion omnibus spending bill to address the COVID-19 pandemic. This bill, one of the largest ever passed by the US Congress, includes approximately $900 billion in pandemic economic relief and $1.4 trillion in the 2021 fiscal year budget.

However, On December 22, US President Trump threatened not to sign the recently passed $900 billion COVID-19 relief bill. Trump claimed he would ask Congress to "amend and improve" the bill, increasing the amount of stimulus checks and removing wasteful spending.

Trump said he would ask Congress to amend the recently passed $900 billion COVID-19 relief bill, saying it contained too much foreign aid and not enough aid for struggling Americans. Trump asked lawmakers to increase the amount of stimulus checks most Americans would receive from a "ridiculously low" $600 to $2,000, or $4,000 for couples.

In a video posted on Twitter, Trump said: "I am asking Congress to amend this bill and increase the ridiculously low $600 to $2,000, or $4,000 for a couple." Trump also said that if Congress could not provide the relief he wanted, it would be left to the next administration. He said, "Maybe that administration will be me, and we'll get it done."

Following Trump's threat against the $2 trillion pandemic relief and federal funding bill, Democrats took action to try to increase the amount of stimulus checks. House Speaker Nancy Pelosi supported Trump's suggestion and urged Democratic lawmakers to support the proposal. On December 24, House Democrats attempted to pass a new proposal in a pro forma session to increase the $600 per person payment to $2,000 per person, but the proposal was rejected by Republican lawmakers.

Pelosi said she would reconvene lawmakers on December 28 to vote on the $2,000 per person proposal, and if President Trump was serious, he should urge Republicans not to oppose the proposal.

Pelosi said: "House and Senate Democrats have repeatedly sought to increase the amount of the checks, but Republicans in both chambers have repeatedly blocked it, first saying during our negotiations that the checks could not exceed $600, and now they are blocking the vote. If the President is serious about direct payments of $2,000, he must urge House Republicans to end their obstruction of the proposal."

House Republican Leader Kevin McCarthy said Democrats should address foreign aid and wasteful spending items.

Despite the uncertain fate of the US fiscal stimulus package, investors largely ignored it, and gold prices remained firm.

Gold prices rose on Thursday (December 24), boosted by the continued decline in the US dollar after the UK and EU reached a trade agreement. Spot gold closed at $1,879.25 per ounce, up $6.51 or 0.35%, hitting a high of $1,883.48 per ounce during the session.

Adam Crisafulli of Vital Knowledge said in a briefing: "The market won't care too much about Trump's criticism of the stimulus bill, as a formal veto is considered unlikely, (and) the combined stimulus/budget bill passed both houses with veto-proof majorities. Even if Trump successfully vetoes the bill, Biden will become president in 27 days and can sign it then."

UBS analyst Giovanni Staunovo said, "Investors are quite optimistic about the fiscal and monetary support from governments around the world." Gold is considered a hedge against inflation and currency devaluation, and has risen more than 23% this year with the help of large-scale stimulus measures.

Raymond James analyst Ed Mills said: "President Trump's request to revise the coronavirus relief bill to increase individual payments to $2,000 adds significant uncertainty to the coming days, but our base case remains that the bill passed by Congress will become law."

Natixis analyst Bernard Dahdah said: "Even if Trump refuses to sign the bill, the market generally expects Biden to pass it, so we don't see any downside for gold prices at the moment."

Jigar Trivedi, commodities analyst at Mumbai brokerage Anand Rathi Shares, said: "The market expects the stimulus plan to pass, which should support higher gold prices."

Edward Moya, senior market analyst at OANDA, said: "Economic data only reinforces the belief that the economy is slowing, which should help negotiations on stimulus measures... It's highly likely that some form of stimulus will be reached. The slight weakening of the dollar pushed gold prices higher."

The well-known financial news website Economies.com wrote that gold prices remain around $1,875.00 per ounce, and gold prices continue to try to break through this level, which supports the possibility that gold prices will continue their main upward trend. We will continue to predict that gold prices will be in an upward trend for some time to come. As long as gold prices remain above $1,862.00 per ounce, the outlook for gold prices remains valid, with the next target at $1,911.50 per ounce, and a higher target at $1,928.60 per ounce.

Hussein Sayed, chief market strategist at FXTM, said: "If asset managers want to lock in some profits and reduce portfolio risk, gold could see significant inflows in the final days of 2020. As long as real yields remain in negative territory, we remain bullish on gold, which is likely to be the case for the next year." This is why gold prices may eventually reach $1,900 per ounce next week.

Jim Wyckoff, senior analyst at Kitco, said that gold bulls have a short-term technical advantage next week. Wyckoff wrote: "The first resistance level is at Tuesday's high of $1,889.40, then $1,900.00. The first support level is at this week's low of $1,859.00, then $1,850.00."

Historic Brexit deal reached

On Thursday, December 24, the UK and the EU reached an agreement on a new post-Brexit trade arrangement, more than four years after the UK voted to leave the EU, avoiding a potentially disastrous no-deal scenario. The UK government said a Brexit trade deal had been reached, and all key red lines on sovereignty had been met. This is a major milestone in the Brexit process.

British Prime Minister Johnson announced on Thursday that Britain has completed Brexit and will achieve full political and economic independence from January 1 next year. Britain has regained control over its money, borders, laws, trade and fishing waters; at the same time, the agreement ensures that Britain is not bound by EU rules.

Johnson said at a press conference that he hoped to end any uncertainty. I am pleased to tell you that we have completed the biggest trade deal to date. This deal is a comprehensive Canada-style agreement that will enable our companies to do more with European countries. We have regained control, and the jurisdiction of the European Court of Justice (ECJ) is over. The UK's share of fisheries will rise from about half to two-thirds, and we will become an independent coastal state.

According to the announcement released by the European Commission, the core of the agreement is a "EU-UK Free Trade Agreement", covering trade in goods and services, investment, competition, prohibition of state aid, taxation, transport, energy, fisheries, data protection, social security coordination and many other aspects between the EU and the UK. The agreement clarifies that after January 1 next year, both sides will implement zero tariffs and zero quotas for all goods that apply to the rules of origin; for the fisheries issue, which once became a "bottleneck" in the negotiations, both sides will develop a new framework for the joint management of EU-UK fisheries resources, taking into account the interests of each other's fisheries and fishermen.

In a statement, the British Prime Minister's office pointed out that this agreement means that Britain has "taken back control of our money, borders, laws, trade and our fishing waters"; this agreement has fulfilled everything promised to the British people in the 2016 referendum and last year's general election, "we have delivered Brexit, and we can now fully exploit the fantastic opportunities available to us as an independent trading nation, striking trade deals with partners around the world".

European Commission President von der Leyen tweeted that the EU's agreement with the UK is fair and balanced. The agreement protects the EU's interests, a fair competitive environment and the EU's fishing rights in UK waters. Von der Leyen also said at a press conference that the EU had secured five and a half years of fishing rights for the UK, and that the EU would continue to cooperate with the UK in areas such as climate change, energy and transport.

Von der Leyen said that the UK and the EU have reached a Brexit trade agreement. Von der Leyen praised the agreement. At a press conference, von der Leyen said: "It has been a long and winding road, but we have achieved a lot. It is fair, it is a balanced agreement, and it is the right and responsible thing to do for both sides."

Von der Leyen said that our negotiating position was strong because the EU said that if the UK wanted to enter the single market without quotas, they could freely decide whether to act according to the rules. She said Europe would continue to cooperate with the UK in all areas, and she called the UK a "trusted partner".

The UK officially "left the EU" on January 31 this year and entered an 11-month transition period, which ended on December 31. During the transition period, the UK was no longer a member of the EU, but remained in the EU single market and customs union, and, like other member states, complied with all EU rules. Since March, both sides have been engaged in intense negotiations to determine how business will operate from January onwards.

The UK-EU trade agreement will come into effect on January 1 next year, ensuring "duty-free" trade for most products between the two sides, and establishing a platform for future cooperation on issues such as crime fighting, energy and data sharing.

Citigroup analysts said the Brexit deal would help mitigate economic disruption and provide a fresh start for a constructive future economic and political relationship.

On the afternoon of December 24, local time, after the EU and the UK announced that they had reached a Brexit trade agreement, German Chancellor Merkel said that the agreement was "historic and would lay the foundation for a new chapter in the relationship between the EU and the UK". She stressed that even after leaving the EU, the UK would remain an important partner for Germany and the EU.

French President Macron said: "Europe's unity and firmness have paid off", and called the agreement "crucial".

British Prime Minister Johnson said he hoped British MPs would vote on the Brexit deal on December 30. The UK opposition Labour Party said on Thursday that they would accept and vote in favor of the trade agreement.

Keir Starmer, leader of the UK's largest opposition party, the Labour Party, said the Labour Party would support the UK-EU trade agreement. But he also pointed out that the UK-EU trade agreement is not perfect.