The yellow metal rebounded strongly in the last two trading sessions of the week.
The strong rebound in the precious metal market is largely attributed to the new COVID-19 pandemic-related restrictions taking its stronghold globally and stock markets in the United States coming under immense pressure from such prevailing macro.
- At the time of writing this publication, Gold futures were rallying around $1,871/ounce.
Against all odds, there seem to be high hopes on the yellow metal heading towards the $1,900 mark again, partly because there are credible reports pointing towards a new wave of quantitative easing coming from the world’s biggest economy, in order to support the fragile economy.
- Such prospects for more monetary bailout pushed gold gain 3.3% last week, rebounding from a 5% drop the week before.
What they are saying
Stephen Innes, Chief Global Market Strategist at Axi, gave a well-detailed report to Nairametrics on the prevailing macros weighing on investors’ minds, as regards COVID-19.
Innes said, “Investors are adopting an all too familiar stance trying to weigh near-term COVID-19-related headwinds vs a better long-term vaccine and stimulus-related outlook.
“But something to think about when it comes to COVID-19 vaccines is the take-up from the general public, which is something The Wall Street Journal looks at today. It cites two recent surveys that suggest a fair amount of scepticism in Europe towards the vaccine. A poll in November from the University of Hamburg showed those hesitant or unwilling to take the vaccine were at around 40% across seven European countries.
“An Ipsos poll taken in early October found that almost one-third of Japanese and nearly 50% of French respondents also said they wouldn’t get vaccinated.
“The Ipsos poll put the primary reason down to concerns over how the vaccine was developed. Keeping in mind vaccines doesn’t help the economy recover, but vaccinations do.”
Gold traders are pinning their hopes that the precious metal would stay above the $1,850 price level at least for the near term, as week’s softer than expected US Job report might have injected some urgency into US fiscal negotiations.