After negotiations with the Democrats on a virus relief plan ended without agreement, US President Donald Trump on Saturday signed an executive order for a payroll tax holiday for American workers.
The move has the potential to put more money in peoples’ wallets by temporarily suspending the collection of payroll taxes for those earning less than $100,000 a year.
The deferral will start on September 1 and run until December 31. Despite it being only a temporary measure, it could to a certain extent have negative consequences down the road.
As well as the payroll tax suspension, investors will continue to keep a close eye on negotiations in the US over the next round of economic stimulus measures.
While hopes grow on the stalled talks between Democrats and the White House on a new support package for states hit hard by the covid-19 pandemic, delays in reaching a deal weighing on market sentiment are not expected to push gold much lower than its current price in the near future.
The gold market has been bearish since last Friday, at a high of $2,072.50 per ounce and its low sitting at $1,901 on Tuesday.
Based on fundamental and technical analysis, traders can this week consider selling gold in a range between $1,950 and $1,935, setting the sell range at $1,920 to $1,972, the stop loss at $1,980 and taking profit at $1,872 to $1,825 and $1,750.