Gold gives away little in round 2 of vaccine games

LONDON: Bears who thought of doing “another Pfizer ” on gold have been in for a surprise. Short sellers who ravaged the yellow metal last week on the blockbuster results of Pfizer’s Covid-19 vaccine trials tried to repeat the stunt Monday when Moderna Inc (NASDAQ:MRNA) announced even better efficacy from its own coronavirus test shots. Gold did dive on the Moderna news, but rebounded quickly this time, to actually end the day slightly higher – unlike the near 5% plunge on the Pfizer Inc (NYSE:PFE)announcement that prevailed through most of last week.
For context, Moderna said its experimental vaccine was 94.5% effective in preventing COVID-19, versus Pfizer’s 90% efficacy. The Moderna product also needs just regular refrigeration versus the -90 Fahrenheit needed for what Pfizer has developed.
In Tuesday’s trade, U.S. gold futures for December delivery settled down $2.70, up 0.1% at $1,885.10. This was despite rival dollar losing some 0.25% of its value – a dynamic that would have normally boosted gold.
The spot price of gold, which reflects real-time trades in bullion, was down $2.36, or 0.1%, to $1,886.55 by 2:57 PM ET (19:57 GMT). The action has, undoubtedly, left gold bears, even long-term watchers of the precious metal, nonplussed.
“XAU/USD trades within a tight $1,885-$1893-ish range despite a softer USD,” gold chartist Joel Frank said in a post on FX Live, using the trading symbols of bullion and the dollar.”
Gold traders continue to weigh conflicting themes of increasing vaccine optimism versus the worsening of the pandemic/more accommodative central banks, he added.
Craig Erlam, analyst at OANDA in New York, concurred that gold was giving away little in the current round of the vaccine games that made it difficult to get a read on the haven’s direction.
“A softer dollar in recent days has alleviated some of the pressure on gold but it’s still struggling to pull itself considerably off its lows,” Erlam said in a note. “Once again, the yellow metal found support around the $1,850-1,860 region but it has since struggled to break back above $1,900. Perhaps this is a new short-term range that’s emerging for gold.”
Some analysts are now casting the ball as far forward as Jan. 5 – the date for the two Senate run-offs in Georgia that Democrat lawmakers need to win if President-Elect Joe Biden is to pass a Covid-19 stimulus large enough to boost gold prices like a previous fiscal relief in March.