Gold futures recent loss of luster continued on Thursday as investors weighed reported progress on multiple COVID-19 vaccines. The yellow metal had experienced a tremendous rally from the initial March 1450 pandemic low to the near 2100 August highs but the market has since consolidated wrapped around the 1900 mark while the December Gold contract (GC20) has drifted back down to test the 1850 low end of its recent price range. With the election in the rearview mirror and stimulus talks on the back burner, daily pandemic news continues to be front and center, Joe Schulte from Charles Schwab briefs.
“After last week’s positive Pfizer study, Moderna reported encouraging results of their own this week. Progress on the vaccine front has precious metals on the defensive as the potential for an eventual return to economic stability and growth erodes the safe-haven attraction.”
“Profit-taking, and a surging equity market, have seen metal prices stagnate. Outflows of money from gold exchange-traded funds and into other sectors has continued to track in recent weeks.”
“Despite the encouraging vaccine trials for the future, the recent troubling spike in infections at home and abroad has raised more immediate concerns. Infections have surpassed 55 million globally with over 1.3 million deaths. Here in the US and in Europe, we have seen a return of lockdown measures to combat the spread. Any resumption of extended lockdowns, and their resulting drag on economic activity, will be supportive to gold until the vaccines become a reality.”
“The US Dollar’s woes continues to offer some support to gold with the US Dollar Index slipping back to test the 92.00 support level again this week.”
“First support will be encountered at the 1848 level. A move below that mark will then have the 1806 200-day moving average in sight. Rebounds will find first resistance at 1884 and 1898. Longer-term resistance will be found at the 1966 high posted a week ago Monday. The 14-day RSI bears watching as the reading has slipped to 43.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.