Pfizer’s COVID-19 Vaccine weighs on Gold pricesGold traders are presently under pressure and nursing their wounds amid news that Pfizer’s COVID-19 vaccine had proven 90% effective in trials has reported few days ago, sent the price of gold arbitrarily below the $1,900/ounce price levels
As it broke key price supports around $1,950/ounce, and finally $1900/ounce amid a pending wave of quantitative easing after Joe Biden was declared the winner of the recently concluded U.S election.
It’s fair to elaborate that gold traders were caught unawares as gold bears wreaked havoc at unprecedented levels, aftermath prices have recovered slightly, at the time of writing this publication the yellow metal was trading at about $1,889/ounce. The sudden rebound has seen lately in the greenback also clampdown on any bullish resolve in keeping price above $1,900/ounce.
The precious metal is fast losing its safe-haven status on the bias that its inverse correlation to stocks is much less appealing as global investors look into other alternatives as seen in recent days.
Digging deeper, into a key macro distorting gold prices is COVID-19 vaccine on bias that it pushed 10-year U.S Treasury yields to their highest point since COVID-19 pandemic started, meaning the surge in U.S Treasury yields and impressive gains recorded relatively in global stocks means it might just be a matter of few weeks for the precious metal to fall below the $1,800 price level.
This has kept gold traders bearish in the near term, on the bias that the precious metal is priced lower and not until a Joe Biden’s presidency comes to effect we might see the bullion metal trading below $1,800 price levels.
It would be unfair ruling out gold bulls as the mother of all stimulus packages seem to be on its way, judging by reports on the blue party’s economic agenda in bailing out a fragile economy battered by COVID-19 virus, means gold prices could recover remarkably after the end of January 2021.
However if the COVID-19 vaccine plus the stimulus deal creates a reflationary impulse not seen before, the U.S central bank might have no option but to lift interest rates earlier than expected, meaning gold investors might have a lot to battle for, as prices could tank below $1500/ounce in the long term.