Gold Price Prediction – Prices Tumble as Yields Soar Following Vaccine AnnouncmentThe dollar rises paving the way for lower gold prices
Gold prices reversed course on Monday, tumbling lower and testing support, as the dollar rose and US yields surged. The 10-year US treasury yield surged higher on Monday rising to 95-basis points, a robust 14-basis point climb. US yields rose following news that Pzifer announced that it had great success with its COVID-19 vaccine. The 90% success rate help buoy the equity markets putting upward pressure on US yields. This helped buoy the dollar paving the way for lower gold prices.
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Gold prices reversed its upward climb and tumbled on Monday. Prices sliced through support near the 50-day moving average at 1,900, which is now seen as short-term resistance. Prices appear to have bounced just ahead of support near the September lows at 1,848. Short-term momentum is negative as the fast stochastic generated a crossover sell signal. Medium-term momentum has turned neutral and is poised to generate a crossover sell signal.
Riskier assets surged helping to push US yields higher following the news from Pfizer. Pfizer and BioNTech announced Monday their coronavirus vaccine was more than 90% effective in preventing Covid-19 among those without evidence of prior infection. Albert Bourla was interviewed on CNBC saying that its the most significant medical advance in the last 100 years. The announcement comes as drugmakers and research centers scrambled to deliver a safe and effective vaccine.