Vaccine News Fuels Risk On Moves

It was a brutal day for gold bulls yesterday as the safe haven asset was seen plunging sharply on reports that the Pfizer/BioNTech vaccine under development has proven to be over 90% effective in clinical human trials. The US and German firms have been working In partnership for several months on the experimental drug which has been tested on tens of thousands of patients. According to the data, the trials found no serious safety concerns and are expecting the US health authorities to grant approval for emergency use as soon as this month.

Announcing the news, Pfizer’s chairman and CEO Albert Bourla said: “Today is a great day for science and humanity. We are reaching this critical milestone in our vaccine development program at a time when the world needs it most with infection rates setting new records, hospitals nearing over-capacity and economies struggling to reopen.”

Should Pfizer and BioNTech receive authorisation for their drug, the big questions then will be in relation to how quickly they can roll it out. There are also other questions which many in the industry, as well as global governments, wish to know such as: how long will the vaccine be effective and how many doses will be given per patient. Regarding how long the medicine will be effective for, BioNTech’s CEO Ugur Sahin told Reuters that he was confident the vaccine would provide up to one year of protection against the virus, though this had not yet been confirmed for certain.

Details To Follow

The news offers a lot of hope for the global economic outlook, especially moving through next year and markets have reacted accordingly with equities surging to fresh highs and gold prices coming under heavy selling pressure. Gold prices shed over 5% yesterday as the market plunged in a wave of risk on trading. Notably, there were also several notable losses within the equities space, specifically those companies which have benefited from the lockdown measures in place and the large scale shift in business operations: Zoom saw a near 20% drop as traders looked ahead anticipating an end to the video conferencing which has become so rife during the lockdowns over 2020. This story will continue to attract a great deal of attention as further updates are announced and further market volatility can be expected as more details are received.

Technical Views

GOLD

From a technical viewpoint. Gold prices saw a brutal reversal lower yesterday, marking gold’s biggest sell off since early August. Price is now firmly below the 1926.63 level and closing in on a retest of the broken bearish channel while currently being held up at the 1858.28 support. Below here, the view turns bearish once again in the near term.

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