After the first talk from news that the BionTech-Pfizer vaccine has proven to be more than 90% effective in phase III tests, and the first talk from news that its effectiveness and distribution are questionable, Kim was won towards the end of the week. The market surged Monday in response to US election results, but precious metals have risen even higher as investors return to reliable, safe haven assets, coupled with decline optimism about treatment vaccines.
After a 1.65% drop in the past month, pot gold rose 0.8% per ounce to $1,890.90 on Friday afternoon (14:36 GMT), while US gold futures rose 1% to $1,892.20.
A joint survey released this week by Central Banking and Invesco revealed that 23% of the World Central Bank viewed it as a “more attractive asset” following the Covid-19 pandemic, while the remaining 77% said they “have not changed” their views on gold.
Opinions have not changed significantly, but central bankers “generally expect gold holdings to increase over the next year” and investor citizens view metals as a safe asset amid the turbulence of the market, making the general investor demand for gold “robust” throughout the pandemic.
Commenting on Friday’s profits, Kitcomatals senior analyst Jim Wyckoff told Reuters.
“We are struggling with Covid-19 outrage in the US and the uncertainty that there is a possibility of more economic damage in the coming months. Everything that works in the favor of the Gold Market Bulls.”
He added: “Everyone was excited about the vaccine, but it will not be available for general consumption until winter and spring.
Eli Tesfaye, senior market strategist at RJO Futures, also showed weight.
“There’s a fear of a second wave with lockdowns and restrictions, and the market has to overcome (some) stimuli, whether we’re lame or a new presidential election. So at some point the market needs to predict its cash and price in potential inflation.”
Not only did gold get a boost from the weaker US dollar index on Friday, but it also saw a drop in crude oil prices at $40.50 a barrel.
Christopher Lewis is writing a price forecast for FXEMPIRE today, claiming that gold appears to be set on an upward trajectory in the near future.
“For the central bank, we can argue that gold will be higher regardless of what happens next, but when we start talking about currency destruction and slowing the economy, gold is a bit of a “safe trade.”
“If the coronavirus situation continues to cause major problems, we are looking at a scenario where people are trying to pick up money to protect their wealth in order to slow down the economy.”
