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Gold Falls, Yields Rise On Pfizer Vaccine

By MarketPulse (Craig Erlam)CommoditiesNov 09, 2020 04:33PM ET
www.investing.com/analysis/gold-falls-oil-rises-on-vaccine-news-200544001
Gold Falls, Yields Rise On Pfizer Vaccine
By MarketPulse (Craig Erlam)   |  Nov 09, 2020 04:33PM ET
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Gold Getting Whacked As US Yields Rise On Vaccine News

The dollar isn’t faring too badly and is actually a little up on the day despite having widely been adopted as a safe haven asset. This is very much not a risk-averse day but it seems it’s the yen that’s taking the brunt of the hit, while risk currencies are doing very well.

Interestingly, gold is getting whacked in the wake of the vaccine news. US rates are rising on the back of the announcement and that’s bad news for the yellow metal which has fallen as low as USD1,900, having traded above USD1,950 ahead of the release. Investors now clearly betting on a stronger economic recovery and everything that comes with it.

Perhaps we’re now seeing a bit of a reset moment for gold, where its correlation with risk assets starts to fade and it returns to its traditional roots as a safe haven instrument. Although this may be a little premature at this stage.

Oil Prices Surge On Vaccine Outlook

Oil prices are soaring on the back of the vaccine announcement. Brent and WTI have jumped 6% on the announcement, taking gains for the day to almost 10%. WTI now finds itself back above USD40 for the first time since Oct. 23 while Brent nipped above USD43 before paring back slightly.

Oil has had an absolutely horrific year with the pandemic hammering demand and, at one point, pushing crude prices negative. Well, that may now change with a vaccine providing a sustainable solution to an utterly horrific problem that has caused carnage across the globe.

Whether the vaccine will come soon enough to warrant pushing ahead with production increases in January is another thing. Producers have plenty of cause for playing it safe but if vaccine news between now and year-end returns prices back to more sustainable levels regardless, they may find there isn’t as much desire to postpone increases as there was a week or two ago.

Gold Falls, Yields Rise On Pfizer Vaccine
 

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Gold Falls, Yields Rise On Pfizer Vaccine

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Comments (2)
LORD John
LORD John Nov 11, 2020 7:21AM ET
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On what basis  bank of America predicting  gold will reach to 3000 in 2021 ???
TL Chan
TL Chan Nov 09, 2020 11:02PM ET
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Expect gold to falls in steps pattern to below 1600. I always say there isn't a Gold thesis, if with this pandemic, Gold cannot breakout to above 2200, it will never! I believe gold is waste of time, cannot agree with Ray Dalio and Robert, I stopped listening to them for a year now!
LORD John
LORD John Nov 09, 2020 11:02PM ET
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On what basis  bank of America predicting  gold will reach to 3000 in 2021 ???also many portfolios added gold at 1900 level . I think we may see a 200 dollar Jump soon like we have seen from 1200 to 1700 then 2000 .
 
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