Gold falls on vaccine news this morning. Pfizer and Germany’s BioNTech revealed trial data this morning that indicates a 90% effective rate for their Covid-19 vaccine. Gold dropped below $1,900 on the news, while U.S. Stock Futures surged, with the Dow set to rise a record 5% at the opening bell.
The Pfizer effective rate is much better than the market’s hopes. Dr. Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases, has said that a 50% to 60% effective rate would be acceptable. On the basis of these trials, the vaccine would offer protection 28 days after the initial vaccination, which consists of a two-dose schedule. The final vaccine’s efficacy could vary, however, as additional data continues to be collected.
This morning’s drop is hard on the heels of this weekend’s bounce. Gold rose to the highest level in almost two months early Monday as the dollar weakened and hopes of additional U.S. stimulus measures in a Biden administration boosted the precious metal.
Joe Biden, the former vice president, clinched the necessary electoral votes to be widely acclaimed as president-elect on Saturday. But President Donald Trump hasn’t conceded and has instead vowed to fight on in court.
As seen by this morning’s reactions, now that the election is over, financial markets are likely to shift their focus back to progress on vaccines to prevent the coronavirus and the broader growth outlook as the world continues to fight the pandemic, Goldman Sachs strategists said in a report Sunday, according to Bloomberg.
Gold futures rose 3.8% last week to settle at $1,951.70 an ounce on Comex after the December contract advanced 0.3% Friday. Gold is up more than $400 — or 28% — 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. Currently, the December contract has slipped $77.50 to $1,874.20 an ounce and the DG spot price is $1,889.80.
Gold may rally to $1,975 an ounce now that it’s broken through resistance at $1,951, according to a technical analysis by Reuters analyst Wang Tao.
U.S. coronavirus neared 10 million on Sunday and the number could surge even more before Biden takes office on Jan. 20. The rate of new cases is averaging more than 100,000 each day. In remarks to the nation Saturday, Biden said combatting the pandemic would be his top priority, and he pledged to announce a new taskforce of coronavirus advisers on Monday.
The virus known as COVID-19 has killed almost 1.26 million people worldwide and sickened 50.3 million. Almost 20% of the cases — and 19% of the deaths — are in the U.S. The country has 9.96 million cases, more than any other nation.
The economy is closely tied to the pandemic, with the Federal Reserve saying in the statement after its monetary policy meeting last week that “the path of the economy will depend significantly on the course of the virus.” Chairman Jerome Powell said that there’s plenty the central bank can still do to bolster the economy.
Pandemic-related lockdowns have sent millions of Americans into unemployment. But the unemployment rate for October fell to 6.9% from 7.9%, even as growth slowed. Investors will look to the initial jobless claims report Thursday for additional indicators. October consumer price index data comes out Friday, with the producer price index and consumer sentiment index Friday.
Silver futures rose 8.5% last week to settle at $25.66 an ounce on Comex after the December contract gained 8.5% Friday. The most active contract increased 0.6% in October. The December contract is currently down to $24.130 an ounce and the DG spot price is $24.32.
Spot palladium increased 13% last week to $2,509.00 an ounce after gaining 4.9% Friday. It dropped 4.5% in October. Spot platinum advanced 5.8% last week to $899.80 an ounce after increasing 0.4% Friday. It decreased 6% in October. Currently, the DG spot price for platinum is $869.10 an ounce, while palladium is $2,495.90
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