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.
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- 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.
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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.
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“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.
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“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.”
Bottom-line
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.
