Gold prices saw a decline during the Tokyo-session on early Thursday mostly due to Pfizer’s producing the final results of vaccine trials suggesting a 95% effective rate, whereas the Oxford-AstraZeneca vaccine is also on the way with expected good results.
Additionally, the biotech company Moderna Inc. said on Monday that its experimental vaccine was 94.5% effective in preventing disease, according to an analysis of its clinical trial. Moderna expects to be capable to ship about 20 million vaccine doses in the US by the end of 2020.
Global fear versus China’s stand in Hong Kong also affects global risks. Policymakers from the US, Australia and the UK jointly released a statement advising China to stop depressing the rights of the people of Hong Kong by respecting international commitments. Moreover, there has been some speculation that the US Senate will go on a break until the week comprising November 30th without any updates on the stimulus, also weigh the market sentiment.
Aside all these, the S&P 500 Futures mark 0.2% intraday gains after Wall Street benchmarks closed in the red.
Looking ahead, the yellow metal is exposed to downside risks, as the risk-aversion on the global markets could become more prevalent and renew the dollar’s recovery momentum, as investors take note of the new shutdowns worldwide and its likely impact on the global economic recovery.
In addition, the vaccine optimism will eventually fade, as its distribution is seen likely after Spring 2021.
On the Technical side, Gold has come below the 4-hour 21 and 50 period SMA signaling further losses testing $1850 level but extending to $1800.
Also, the 4-hour Relative Strength Index (RSI) holds in the bearish area but above the oversold territory, signifying that there is some more room to the downside.
Traders today expect Gold volatility as analyst digest negative and positive news about global risk around the world. We expect more downside movement below $1850 but with bounce back at the $1800 level.
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