The yellow metal was down at the fourth trading session in London. The selling pressure seen lately in the gold market is coming on macros revealing Pfizer’s safety data to advance its COVID-19 vaccine to the U.S. Food and Drug Administration for approval, coupled with the U.S dollar rebounding up.
At about 6.15 am West African time, Gold futures lost about 0.41% to trade at $1866.20/ounce.
What this means
The rebound seen lately in the U.S dollar has helped diminish appetite for the precious metal with the U.S dollar rising, as global investors move from stocks to the more risk-averse asset. A stronger U.S dollar makes the yellow metal more expensive for holders in other major currencies.
Adding more woes to gold bulls include reports from Pfizer/BioNTechvaccine team that they have enough safety data to advance their COVID-19 vaccine candidate to the U.S. Food and Drug Administration for approval within days.
What you should know:
- Global Investors buy the hard safe haven asset mainly to hedge against inflation and for wealth preservation.
- Gold traders, global investors also consider buying gold as a way of diversifying risk, via using futures contracts and derivatives.
What they are saying
In an explanatory note to Nairametrics, Stephen Innes, Chief Global Market Strategist at Axi, spoke on the prevailing reports affecting the precious metal market.
“Gold markets remain pretty stagnant, but the buy on dip mentality still prevails with US Fed Chair Powell and Vice Chair Clarida sticking to script this week. Both acknowledge the surge in coronavirus cases is a big concern for an economic recovery that still has a “long way to go” and the economy will continue to need support from fiscal and monetary policy.”
Nairametrics doesn’t have much of a salient view on the yellow metal in the near term, as other riskier assets (Stocks, Cryptos) are lighting up more distinctively for the eventual 2021 reflation tick up, which has lesser issues about the concerns of rising U.S Treasury yields.