Gold prices have shifted investors from safe shelter assets, falling almost 2% from Monday’s four-month low after better than expected US business activity data and optimism over progress in Covid-19 vaccine development.
Spot Gold fell at $1,839.73 to 1.68% per ounce after slipping to its lowest level at $1,834.95 since July 21.
The stock market jumped at the fastest rates in US business activities in the five years in November, with even the most rosy forecasts from Reuters rising, bounced back with news that investors were a few inches away from gold a year later.
Meanwhile, across the UK pond, the Coronavirus Vaccine Program at the Coronavirus Vaccines released its initial results, showing that JAB can provide over 70% immunity against Covid-19. Investors hoping to outdo the immunity rates of competitors were initially disappointed, but news of another victory in the fight against the pandemic has kept the market higher.
Oanda Senior Market Analyst Edward Moya commented on how today’s update affected gold prices.
“After an incredibly strong US PMI release reduced the need for stimulation, gold fell below the $1,850 key level. We didn’t expect such a strong read in both service and manufacturing.”
Axi Chief Global Market Strategist Stephen Innes shows this all means to gold in the coming weeks.
“Despite all of the Dovish Fed Waxing, they are still trying to form a base after a $100 drop behind Pfizer Vaccine News two weeks ago. Given that $1,850 bounced from about three times, there should be a considerable speculative interest in that level. Also, it might be safe to assume that sharp movements are low if it breaks.
“There is still a lot of wood to carve out to remove the strategic length, and these investors are holding their money in the more medium term given the substantial financial and financial spending across the G10 economy.
“The only short-term potential trigger for a higher mobility is the announcement of a new Treasury Secretary by US Presidential Election Joe Biden, with former Fed Chairman Janet Yellen currently in favor of the resumption of debate over the second US stimulus package.” ”
