International spot gold (on November 9) pressure on the slump, hit $1965.52 an ounce after short-term diving more than $100, the lowest hit $1859.73 an ounce, days fell more than 4%, by Pfizer and BioNTech cooperative research and development of new vaccine was big, the market risk by mood boost, the stock market soaring gold short line at the same time. As the current drivers of gold are mainly from two aspects, one is the market’s safe-haven demand, the other is the risk of inflation caused by fiscal stimulus policies. Therefore, in the absence of a boost to inflation risk, gold prices will quickly retreat if the coVID-19 risk aversion is rapidly curtailed.
A covid-19 vaccine developed by Pfizer and Germany’s BioNTech has been found to be more than 90 percent effective, a major breakthrough that could put the vaccine into use by the end of the year if approved. According to a Pfizer statement, by the third week of November, if the current availability is found to be correct, it is expected to submit an emergency use authorization this month. Meanwhile, Fauci, director of the National Institute of Allergy and Infectious Diseases, said Moderna’s vaccine might be about as effective as Pfizer’s. This means that the simultaneous launch of two vaccines could be on the market before the end of the year, bringing a crucial reversal of the epidemic situation around the world.
“This is probably the best news for the world, the United States and public health,” said William Gruber, Pfizer’s senior vice President of clinical vaccine development. This, he says, was even better than the best he could have hoped for. Cruise operators, airlines, hotels, amusement parks, cinema operators and others that have been hit by blockades or restrictions have seen their shares soar.
Markets.com Neil Wilson said, the market is expected to 2021 “weak” industry (such as travel and hotel industry) will recovery, the initial optimism too high and likely to fade – we should not let it here – but in the end, the effectiveness of a vaccine will be good for the economy, and is advantageous to the we think will be split in the United States congress struggling periodic market means less exciting. An effective vaccine has positive implications for periodicity and value – essentially reopening trade.”
It’s worth noting, though, that the short-term boost to the mood is more positive, but even if all goes well, full vaccination won’t be available until next year. For now, Pfizer says that although it expects to receive emergency authorization by the end of November, only 50 million doses of the vaccine will be available by the end of the year, compared with 650 million by 2021.
On a technical level, gold has returned to its previous downtrend range on the daily chart, indicating that the bulls’ recent rally is beginning to fail. A re-test of support around the flag’s lower track below $1840 will not rule out a further break, which could open up more room for downtrend and possibly even a dip below the 200-day moving average of $1,780.
Weekly charts show that after the fall of the 1900 barrier, gold prices may again test 1837 to 1860 regional support. If further below the above support, the market may fall sharply to 1800 or 1765 levels.
Alexander Zumpfe, precious metals trader at Heraeus, said in a note that while the market’s reaction to the vaccine report was not surprising, there was no change in the medium term positive outlook for precious metals and interest rates will remain low to negative for the foreseeable future, making gold still attractive to investors.
Daniel Ghali, the commodity strategist at TD Securities, said the overall gold market was already overbought after the previous rally.