Gold Climbs Back After Vaccine News Dip

Gold Climbs Back

Gold climbs back after vaccine news once again raises hopes. Drugmaker Moderna announced positive news on the effective rate of its COVID-19 vaccine, raising hopes for the economic recovery. The headlines took a bit of shine off gold’s safe haven status, but investors quickly stepped in to buy the dip.

Earlier Monday, gold neared $1,900 once again as the dollar weakened and coronavirus cases mounted. The yellow metal then retreated more than 1% (Spot gold to $1,875.71 per ounce and gold futures at $1,873.80) on Moderna becoming the second company in a week to report late-stage clinical trial results that exceeded expectations. Within an hour, bulls bought the dip, bringing the bullion’s price back almost $15 an ounce.

In response, the Dow was up over 300 points at the opening bell.

U.S. coronavirus cases topped 11 million infections, and the new daily case count is approaching 200,000. Many states and cities — as well as countries around the world — are imposing new lockdowns.

Gold futures fell 3.4% last week to settle at $1,886.20 an ounce on Comex, though the December contract rose 0.7% Friday. Gold is up more than $350 — or 24% — so far this year as investors have flocked to gold because of uncertainty from the coronavirus pandemic and the economy. It slipped 0.8% in October, its third consecutive monthly decline. The December contract is currently $1,888.90 an ounce and the DG spot price is $1,890.10.

In economic news Monday, China reported industrial production rose 6.9% in October from the year earlier, beating forecasts for a 6.5% gain. The figure reported by the National Bureau of Statistics was little changed from September. China’s retail sales data showed a gain of 4.3% in October from the year earlier, missing forecasts for 4.9% but up from 3.3% in September.

Outgoing U.S. President Donald Trump plans to enact a series of hardline policies against China during his last few weeks in office, Axios reported Sunday, citing unidentified senior administration officials. A trade war between the two superpowers sent gold soaring throughout 2019.

Investors are awaiting U.S. retail sales figures for October on Tuesday for the next clues about the state of the economy. Pandemic-related lockdowns have sent millions of Americans into unemployment, but weekly initial jobless claims beat expectations last week, an indication that the labor market is improving.

The virus known as COVID-19 has killed 1.32 million people worldwide and sickened 54.3 million. Almost 20% of the cases — and 19% of the deaths — are in the U.S. The country has more than 11 million cases, more than any other nation. Pfizer announced earlier this month that it had developed a vaccine that was 90% effective in trials.

Investors are likely to keep an eye on Brexit negotiations underway this week in Europe as well as Trump’s legal challenges to the election he lost to President-elect Joe Biden earlier this month.

Silver futures fell 3.5% last week to settle at $24.78 an ounce on COMEX. The December contract gained 1.9% Friday. The most active contract increased 0.6% in October. Currently, the December contract is $24.69 an ounce and the DG spot price is $24.67.

Spot palladium decreased 6.8% last week to $2,338.50 and was down 0.7% Friday. It dropped 4.5% in October. Spot platinum slipped 0.1% last week to $898.70 an ounce. It rose 1.3% Friday and fell 6% in October. The DG spot price for both metals is currently up over $15 an ounce with platinum at $916.10 an ounce and palladium at $2,355.10


Disclaimer: This editorial has been prepared by Dillon Gage Metals for information and thought-provoking purposes only and does not purport to predict or forecast actual results. This editorial opinion is not to be construed as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein cannot be attributable to Dillon Gage. Reasonable people may disagree about the events discussed or opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. It is not a solicitation or advice to make any exchange in commodities, securities or other financial instruments. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisers with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.