The price of gold has skyrocketed in the United States amidst talks concerning the second stimulus package. Gold reached a record high of $2,000 on Tuesday as lawmakers continue to hammer out details of their next stimulus package. This news comes a little over a week after Senate Republicans finally unveiled their second stimulus proposal, the HEALS Act.
According to Business Insider, gold hit that aforementioned record high on Tuesday as traders piled into the asset, which has been referred to as a “safe-haven” in hopes that another stimulus package would hit the United States sometime soon. The publication noted specifically that spot gold rose about 1.2% to $2,000.58 per ounce before it ended up pairing some gains. Edward Moya, a senior market analyst at Oanda, said that gold may not be done gaining just yet. He said, “Gold has cleared the $2000 level and it might not be done as Treasury yields continue to slide.”
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Since deliberations regarding another stimulus package continue, there is still time for gold to increase in value and reach even more record highs. While Senate Republicans unveiled their stimulus proposal on July 27, the plan was soon met with criticism from lawmakers on both sides of the aisle. More specifically, the proposal drew criticism for its provisions concerning unemployment benefits. Under the CARES Act, the first stimulus package, eligible Americans were entitled to an additional $600 per week in unemployment benefits. Those benefits expired on July 31 without a plan in place to address the issue.
The HEALS Act would include a major reduction in these benefits. In that proposal, eligible Americans would receive $200 per week through September and it would then transition to 70% of lost wages. Speaker of the House Nancy Pelosi was especially vocal with her criticisms for the HEALS Act’s unemployment benefit provisions. She told reporters on Friday regarding the Republicans’ proposal, “Republicans in the Senate came back with a piecemeal approach. Clearly, they and perhaps the White House do not understand the gravity of the situation. This is a freight train that is picking up steam.” She added, “They [Republicans] resent America’s working families, getting the $600, which is essential to their needs. So they’ve offered $200.”
Senators Mitt Romney, Susan Collins, and Martha McSally introduced a possible solution to this dilemma on Thursday. Their proposal would allow states to decide whether to reduce unemployment benefits to an 80% wage replacement or to implement a gradual reduction in those benefits to $500 per week in August, $400 per week in September, and $300 per week in October. Pelosi also shared her critiques for that proposal. “God bless him for having a proposal, I don’t think he can pass that in the Senate either,” she said. “All of it is predicated on a lower benefit for America’s working families at a time where the virus is accelerating.”
