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Gold Settles Sideways As Moderna Vaccine Weighs on Metals Market, US Dollar

November 16, 2020 at 21:32 by Andrew Moran

Gold futures traded relatively flat to kick off the trading week as investors tried to weigh the impact of the latest coronavirus vaccine announcement. The yellow metal also struggled for direction as the US dollar was subdued and traders wait for new economic data, including retail sales and trade, on Tuesday.

December gold futures jumped $0.60, or 0.03%, to $1,886.80 per ounce at 20:22 GMT on Tuesday on the COMEX division of the New York Mercantile Exchange. Gold prices are coming off a weekly gain of 1.3%, but they are down more than 1% so far this month. Year-to-date, gold prices have rallied more than 24%.

Silver, the sister commodity to gold, edged up slightly to start the trading week. January silver futures picked up $0.095, or 0.38%, to $24.87 an ounce. The white metal advanced 3% last week, lifting silver prices to 40% on the year.

On Monday, Moderna announced that it had come up with a COVID-19 vaccine that is 94% effective in preventing the highly infectious respiratory illness. The company did not provide additional details about the next steps, such as logistics and distribution, but the US government confirmed that it will fast track emergency use authorization.

This lifted equities, increasing investor confidence in the broader financial markets as the Dow Jones Industrial Average finished the session just short of 30,000.

The news comes one week after Pfizer and BioNTech announced that they developed an inoculation with an efficacy rate of 90%.

The string of vaccine announcements weighed on the greenback. The US Dollar Index, which measures the greenback against a basket of currencies, tumbled 0.17% to 92.60, from an opening of 92.72. A lower buck is good for commodities priced in dollars because it makes it cheaper for foreign investors to purchase.

Investors are still bullish on gold and silver, mainly because of the expected inflation levels over the next 12 months. In the US, the federal government is $28 trillion in debt, with a debt-to-GDP ratio of 128%. With Joe Biden expected to spend more than his predecessor and the US central bank to be more accommodative in the next few years, gold investors are betting on rampant inflation.

In other metal markets, December copper futures rose $0.0485, or 1.53%, to $3.2265 per pound. January platinum futures surged $34.50, or 3.85%, to $930.50 an ounce. January palladium futures tacked on $5.30, or 0.23%, to $2,335.00 an ounce.

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