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Could A COVID Vaccine Kill Silver And Gold?

By Peter KrauthMarket OverviewNov 10, 2020 04:02PM ET
www.investing.com/analysis/can-a-covid-vaccine-kill-silver-and-gold-200544133
Could A COVID Vaccine Kill Silver And Gold?
By Peter Krauth   |  Nov 10, 2020 04:02PM ET
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Believe it or not, the big deal for precious metals this week was not the U.S. Election.

It was news that Pfizer (NYSE:PFE) and BioNtech's (NASDAQ:BNTX) COVID-19 vaccine was over 90% effective in preventing the virus, and would likely be among the first to receive FDA authorization.

Monday was massively risk-on, with the Dow soaring 4% to a new record high, 10-year treasuries yields shot up almost 17% in a single day as investors dumped bonds, and oil was ahead 8%.

Meanwhile, the U.S dollar index gained about 60 basis points or 0.65%, while higher-beta currencies jumped.

Gold and silver both sold off quite strongly and stayed near their lower price levels.

Naturally, some gold and silver enthusiasts are asking themselves if a vaccine is enough to kill the COVID-19 virus, as well as the precious metals bull market.

And based on the initial reaction of these metals, it’s a natural question. 

So let’s look at the implications.

Is The Gold and Silver Party Over?

The encouraging news everyone’s been waiting for appears to finally be here. We’re getting a glimpse of light from the end of this long tunnel.

As a result, gold dropped $84 or 4.3%, while silver lost 5.3%, on this news.

But is this a sign of things to come, or a knee-jerk reaction that’s just short sighted?

Although highly positive and very reassuring, the truth is we’re not going to be lining up tomorrow to get our first of two doses of Pfizer’s vaccine.

The road to normalcy, whatever that will mean, is still a long one.

Consider that Pfizer expects to only produce 50 million doses this year, and up to 1.3 billion in 2021. Logistics will be a challenge, as the vaccine will need to be stored at -70 degrees Celsius, which is much colder than other vaccines.

Storage, transportation, logistics, security, and prioritization will all be complex. The first to receive the vaccine will be higher risk people and healthcare providers. Two doses, 21 days apart, are required.  

Basically, it’s going to take quite some time to get this vaccine rolled out and administered even in developed nations. Imagine for a moment what that might look like in developing ones. That could keep travel and other sectors, that can’t easily implement social distancing, from recovering early.

And I’ve barely scratched the surface of challenges brought on by a vaccine roll-out.

The Solution May Only Exacerbate Things

Realistically, COVID-19 is a long way from being a distant memory.

Restricted movement, quiet cities, empty restaurants, cinemas and gyms, and mostly local tourism. Daily life will continue to trudge forward.  

Unfortunately, that also includes the world’s ongoing geopolitical tensions. I don’t see relations between the two biggest economies, the U.S. and China, cozying up anytime soon, as both sides want to continue “looking tough”.

We know the Fed has promised to keep rates near zero through 2023 to support economic recovery. They also vowed to let inflation “run hot” above 2% to make up for years of anemic levels.

Debts and deficits are going to continue to soar. Even with a Republican-led Senate, Biden’s still likely to get a $500 billion to $1 trillion “skinny stimulus” bill passed early next year.  Though well under the $3 trillion bill passed in May, Goldman Sachs (NYSE:GS) says this would still be nearly 5% of GDP.

Gold and Silver Still Strong

In my view, gold and silver simply had not finished correcting after gold established an all-time record high in August.  

Sentiment is a tricky market driver to navigate.

But one thing is fairly clear, gold and silver hedgers (smart money) have not yet flipped to a bullish stance.  

They remain cautious right now on gold.

And as for silver, they appear to be stuck in neutral.

If anything, the selloff may be the catalyst many have been waiting for to help gold and silver establish a bottom, or at least an end to their consolidation.

I believe Pfizer’s positive vaccine news may only have dented precious metals for a short time, as it scared some weak hands out of the sector.

Odds are smart money is going to start buying the dips and accumulate gold and silver, as it gears up for the next, inevitable rally.

Don’t be short-sighted.

After all, it’s going to take a lot more than a vaccine that kills COVID-19, to also kill silver and gold.

Could A COVID Vaccine Kill Silver And Gold?
 

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Could A COVID Vaccine Kill Silver And Gold?

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Comments (16)
sina azizi
sina azizi Nov 13, 2020 11:18AM ET
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Steven Jacobs
Steven Jacobs Nov 11, 2020 12:36AM ET
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You should shove a bar of gold where the sun don’t shine. Absurd you’d care more about your metals than a vaccince
Tommi Saksala
Tommi Saksala Nov 11, 2020 12:36AM ET
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PLANdemic - its written on the wall. NWO.
tom gwinn
tom gwinn Nov 11, 2020 12:36AM ET
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pretty sure that wasnt at all what he was saying
Rodolfo Barraco
Rodolfo Barraco Nov 10, 2020 11:50PM ET
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Good article 100% on spot
Adamo Nals
Adamo Nals Nov 10, 2020 9:43PM ET
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All I have to say is 8 trillion on the balance sheet and 35 trillion in debt. Gold and silver will be going up 10 times where they are. The question is when. That’s a guarantee
Jose Emenis
Jose Emenis Nov 10, 2020 9:01PM ET
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A -70 degree celcious vaccine going into my vein sounds very painful....
indiacharts Rohit Srivastava
indiacharts Rohit Srivastava Nov 10, 2020 8:59PM ET
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This is only a correction in a long term trend for precious metals. Weekly Chart
la popeye
la popeye Nov 10, 2020 8:17PM ET
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after failing the politico pharma need to reassure a depressing situation with hope but reality is discipline first. The only vaccine available quick and no refrigeration !
Musical Critic
Musical Critic Nov 10, 2020 8:14PM ET
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What a funny headline!!! If that was so, they (gold silver) would never have been valuable. They will always be accumulated until a huge volcano of gold/silver erupts!
Filippo Bulgarini d Elci
Filippo Bulgarini d Elci Nov 10, 2020 7:09PM ET
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Of course gold and Bitcoin will continue to shine... No worries... 👍🏼
Styr Lotus
Styr Lotus Nov 10, 2020 6:50PM ET
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prior to any vaccine we have to fight a second wave stronger than the firt one.
 
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