- Shelter assets plummet before strong rise in stocks.
- Pfizer study shows effectiveness greater than 90%.
- Gold goes from highs in a month and a half, to target the lows of September and October.
Gold is having a crash on Monday, yielding almost 4%. Between the high of the day and the low of the day it fell almost $ 100. Hours ago, gold had traded above $ 1965, still driven by the impact of the US elections. But the news around the vaccine for the coronavirus, generated a dramatic change, pushing XAU / USD down to $ 1867, the lowest level since October 20.
The price of the metal is at $ 1878, still under strong downward pressure, despite moving slightly away from the lows. Volatility remains strong in the markets, although everything is in the same direction.
In Wall Street, the Dow Jones rises more than 5% and the Nasdaq 1.40%. In Europe the main places are with gains between 5 and 8%. Optimism among investors was fueled by the news surrounding the coronavirus vaccine. The Pfizer study tests showed more than 90% effectiveness in volunteers.
While equity assets soared, fixed income assets tumbled. Among currencies, safe havens are falling dramatically, with the Swiss franc and the yen the worst. Gold also suffers since it had been a refuge from expectations of low rates and possible future inflation. But the advance of the vaccine could be highly positive for the economy, putting pressure on central banks to keep interest rates low or negative for an extended period of time.
Credits: Forex Street
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