As we know, the United States recently passed a $1.9 Trillion corona relief package under Joe Biden’s presidency. The impact of which can be seen in many sectors and even in other countries. The Senate approved the box in a 50-49 party-line vote. The package includes payments of up to $1,400 directly to many United States citizens and a $300 weekly payment to the unemployed. We can also notice the effects of this package on the prices of Gold. The gold prices were low for nine months, and it recently rose after the box was introduced and passed. The implementation of the package also brought down the US Dollar to a small extent. Many experts are expecting Inflation in the country.
The Impacts Of Approval Of The COVID Relief Package
Effects on Gold:
Spot gold inclined by 0.7%, i.e., $1712.46 per ounce, and the lowest was at $1,686.40 on June 8. US Gold Futures inclined by 0.7% i.e., $1,709.90. Experts say that the market sentiment on the passing of the $1.9 Trillion packages and the US Dollars decline helped the gold rates get back to their position. One of the experts also stated that “The Inflation will rise definitely, because of the raising costs of base metals and oil.” He also said that he expects some cheques of individuals to go in the Gold exchange funds to coup up against Inflation.
Effect on the Dollar:
The dollar declined compared to other major currencies of large commodity exporters due to investors’ bets. The large commodity exporters are the ones who are going to get benefitted if the prices of commodities such as oil, metals, etc., surge. The prices of crude oil have passed the mark of $70 per barrel, and the reason for this is probably the missile and drone attacks in Saudi Arabia’s oil industries.
Effect on the Market:
The bonds did not remain unaffected due to the $1.9 Trillion package; the new government spending could cause a ripple in the bonds market. The bonds were trading between 1% and 1.59% low at the starting of the year, which has already negatively affected the equity market.
Views of Experts:
Many experts also believe that Inflation might occur, but it won’t last long. There can be multiple answers to this question, and we can’t deny the facts on which the experts tell us that Inflation may occur. But the step was crucial and was a very debated topic in the US. Many people disagreed with the relief package and said that the United States does not need to spend nearly 2 trillion. Many people also agreed with the box saying that it will help boost the economy and bring back its stability.
Conclusion:
There is much impact on the other sectors like metals, oils, aviation, etc. Due to the $1.9 trillion COVID-19 relief package, many people still debate over the necessity of this package. Also, there’s a chance of inflation due to this package, but the experts say it will not last long and hence nothing to worry about.
