FX.co ★ Gold prices already hit record lows but the outlook remain down

Gold prices already hit record lows but the outlook remain down

According to latest data, quotes for gold futures fell on Wednesday, demonstrating the first decline since October 29.

For example, gold futures for December delivery in the New York COMEX stock exchange fell 0.68% and traded at $ 1,872.30 per troy ounce.

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Experts attribute this downward trend to the statement of the American pharmaceutical company, Pfizer. Earlier, its representatives announced that their COVID-19 vaccine showed 95% effectiveness in the final analysis of clinical trials.

The news about the drug came amid a constant increase in the number of COVID-19 infections worldwide, which, according to Johns Hopkins University, has reached 55.7 million. Death rate, as indicated by recent data, has also exceeded 1.3 million.

Due to this frightening picture of COVID-19, it is difficult to overestimate the global importance of an effective vaccine. Fortunately, at the beginning of this week, trials of another vaccine, but this time developed by biotechnology company, Moderna, was also reported to be successful.

Sadly though, for gold, such news became a serious obstacle for growth. And today, the precious metals market is struggling with the consequences of the vaccine, which will become available to the population in the coming months. However, while the promising drug could boost economic activity, market participants are gearing up for a tough and long winter. The pandemic is still raging with confidence in many cities in the United States, Europe and Asia. In addition, millions of people still feel the economic pressures of social distancing measures and lockdowns that have been adopted in various states of the US and other countries of the world.

All in all, in the last couple of days, there was a general decrease in volatility, which was reflected in the precious metals market. Gold and silver prices declined amid growth in most equity markets.

Silver futures for December delivery traded downwards by 1.3% on Wednesday, reaching a price of $ 24.398 an ounce. Contracts, meanwhile, were down 0.6% on Tuesday.

As for COMEX copper futures, contracts for December closed unchanged at $ 3.198 per pound.

Platinum futures for January delivery rose in price by 1.5%, thereby reaching $ 950.90 per ounce.

For December contracts on palladium, price jumped by 1.2% and reached $ 2354 per ounce.

The USD Index Futures, which measures the US dollar against a basket of six major currencies, declined 0.14% and stood at $ 92.273.

Regardless of this situation, gold bulls are still waiting for the price to rise in the long term. Investors believe that new stimulus in the field of fiscal and monetary policy may provide support for the quotes.

Thus, today, a rather unusual situation is developing on the markets: the propensity for risk, which is undesirable for gold quotes, still dominates, but at the same time, uncertainty reigns. Central banks are forced to run the printing press from time to time, and the increase in the number of people infected with the coronavirus does not slow down, which threatens long-term economic consequences.

So, on Thursday morning, gold quotes continue to fall amid the rise of the US dollar.

The yellow metal's price for December delivery decreased by 0.39% (by $ 7.35) on the New York Stock Exchange, amounting to $ 1,866.55 per troy ounce. Meanwhile, silver futures for December fell 0.75% and reached $ 24.27 an ounce.

As a matter of fact, prices have already been dropping for several trading days, but the decline on Thursday is largely attributed to the sharp strengthening of the dollar. Traditionally, if the value of the dollar increases, gold drops in price in the market.

The current situation with the coronavirus also holds back the growth of gold. Just the other day, in the United States, another record for daily growth was broken - the number of infected amounted to more than 180 thousand people. In connection with such frightening statistics, new quarantine restrictions are being introduced in certain states of the US. The situation in Europe, meanwhile, remains no less difficult.

Against this backdrop of growing morbidity in the United States, investors are again returning to hopes for a stimulus package during a pandemic, which could be an excellent motivation for a rise in gold prices. However, if the situation does not change for the better, experts predict a fall in gold to $ 1,750 per ounce.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade
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