October 5, 2020 – Precious metals markets enter this week’s trading with investors eyeing developments in President Donald Trump’s health and the prospects for another stimulus package.

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A declining U.S. Dollar Index helped give the metals complex a boost last week as gold and silver found support. That momentum is likely to continue if the spending floodgates open again in Washington.

Over the weekend while receiving treatment for COVID-19 at Walter Reed Medical Center, President Trump tweeted, “OUR GREAT USA WANTS & NEEDS STIMULUS. WORK TOGETHER AND GET IT DONE. Thank you!”

Some Senate Republicans who are wary of approving another $2 trillion in Democrat-authored deficit spending may now be moved to accept any deal that has the White House’s approval.

Whatever the political merits of more virus relief programs, they won’t come without costs – including likely downside pressure on the value of the Federal Reserve Note and upside pressure on hard assets.

The Federal Reserve itself is also for fiscal stimulus. More debt means more Treasury securities for the central bank to buy up – its preferred way of expanding its balance sheet and ultimately generating more inflation.