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Gold prices settled up but off session highs as investors awaited to see if U.S. lawmakers will be true to their word in putting a Covid-19 fiscal relief package through Congress after months of pledges and failed negotiations.

Marathon talks on the stimulus have continued from Tuesday evening into Wednesday, with just a few hours of break between, among House Speaker Nancy Pelosi, Senate Majority Leader Mitch McConnell and their respective seconds in command — Chuck Schumer and Kevin McCarthy.

All four expressed strong confidence that a deal was imminent, and could include checks in the mail for needy Americans. That pushed gold futures to a one-week peak of nearly $1,870 an ounce.

But the shiny metal came off those highs after the dollar trimmed its losses on negative Brexit news that impacted the pound. Gold was also pulled down by concerns that any stimulus breakthrough promised by U.S. lawmakers remained a promise until its passage through Congress.

On Wall Street too, stock indexes were mixed with tech-heavy Nasdaq the outlier, showing a 0.3% gain, versus a flat S&P 500 and negative Dow.

“I’m surprised that the market reaction to this is so tepid but that might reflect the market pricing this in over the past few weeks, despite the mixed rhetoric,” analyst Adam Button wrote on FX Live.

“It could also reflect today’s weak retail sales and repositioning ahead of the FOMC,” he said, referring to the 1.1% drop in November retail sales and the Federal Reserve’s decision to do more bond buying to support the pandemic-struck U.S. economy. “Maybe it’s a signal that the risk trade is overdone.”

Gold for February delivery on New York’s Comex settled at $1,859.10, up $3.80, or 0.2%. It late trading, it got back above $1,868 but fell short of scaling its session high of $1,869.45, which was a peak since Dec. 8.

Congress passed in March the Coronavirus Aid, Relief and Economic Security (CARES) Act dispensing $3 trillion as paycheck protection for workers, loans and grants for businesses and other personal aid for qualifying citizens and residents.

In the past few months, however, Democrats and Republicans were locked in a bitter disagreement about a successive relief plan to the CARES Act. The stalemate was broken two weeks ago after a bipartisan group of Democrats and Republicans proposed a $908 billion relief bill, which led the two sides to resume negotiations.


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