The gold market is again seeing some selling pressure following more positive news on another potential vaccine for the COVID-19 virus. However, the damage in the precious metals market has been limited compared to last week’s massive selloff.
Monday morning, Moderna Inc said its experimental vaccine was 94.5% effective in preventing COVID-19 based on interim data from a late-stage clinical trial.
Moderna’s news follows on the heels of Pfizer’s and BioNTech’s surprise announcement last week that its vaccine was more than 90% effective in preventing COVID-19.
Although gold prices are under pressure following Moderna’s news, many analysts have said that this doesn’t change the marketplace’s current landscape.
“Positive news on the vaccine front but still in the early days. There are three steps to a successful Covid-19 vaccine: approval, production and distribution, and public take-up,” said Robin Bhar, an independent market analyst, in a comment to Kitco News. “The Moderna vaccine doesn’t change anything in the gold market and I would look for gold to hold support in the $1,850 region.”
In a recent interview with Kitco News, David Madden, senior market strategist at CMC Markets, said that when it comes to potentially more vaccines, a lot of bad news has been priced into the gold market last week.
“Aside from when people can start getting a vaccine when it comes to the virus, we are probably not going to see any bigger news and gold managed to hold up really well,” he said.
Although there will be volatility around new potential vaccines, Madden said that he expects gold prices to continue to move higher as the market focus on the current situation and the economic damage that that coronavirus has already wrought.
Lukman Otunuga, senior research analyst at FXMT, said in an email to Kitco News, that the Moderna vaccine news will continue to boost investor sentiment and punish safe-haven assets like gold. But he added that he sees limited losses for the precious metal.
“Gold prices have already declined roughly 0.70% today amid the positive vibe. While the precious metal has scope to extend losses, $1850 remains a strong support level. There could be a fierce battle between bulls and bears around this level over the next few days,” he said.
“Looking at the technicals, metal in the process of forming a death cross technical formation where the 50-day simple moving average crosses below the 100-day simple moving average while the MACD points to the downside,” he added. “Should $1890 prove to be a tough resistance level, prices may decline back towards $1,858 and $1,850. A solid daily close above $1,890 could swing open the doors back towards $1,935.