Commodity Market: Gold heads for largest weekly loss since late September, vaccine optimism and no stimulus progress in the US weigh

Spot Gold edged higher within a narrow trading range on Friday, supported by a surge in new COVID-19 infections across Europe and the United States. However, the yellow metal looked set to register its largest weekly loss since the business week ended on September 25th due to optimism over coronavirus vaccine progress.

Spot Gold plummeted over 4.5% on Monday, after reports emerged stating that Pfizer Inc’s experimental vaccine had proven to be more than 90% effective against the COVID-19 disease, based on initial trial results.

“Investors may also be wary of other companies announcing trial data in the coming weeks, which if successful, could put more downward pressure on gold,” Jeffrey Halley, senior market analyst at OANDA, said. He also suggested that the commodity might have a difficult time to re-claim the $1,900.

A potential driver for Gold could be news over progress in US fiscal stimulus talks.

However, the fact that “there isn’t a stimulus coming seems to be keeping a lid on it (gold) … If Congress actually comes up with a limited package, that would be beneficial,” ED&F Man Capital Markets analyst Edward Meir said.

As of 11:16 GMT on Friday Spot Gold was edging up 0.16% to trade at $1,880.03 per troy ounce, while moving within a daily range of $1,874.20-$1,882.01 per troy ounce. The yellow metal looked set for its worst weekly performance since the business week ended on September 25th, being down 3.70%. The commodity is trading roughly in the area where it ended October.

Meanwhile, Gold futures for delivery in December were edging up 0.18% on the day to trade at $1,876.60 per troy ounce, while Silver futures for delivery in December were up 0.02% to trade at $24.312 per troy ounce.

The US Dollar Index, which reflects the relative strength of the greenback against a basket of six other major currencies, was edging down 0.14% to 92.83 on Friday, while extending a pullback from Wednesday’s one-week high of 93.21.

Meanwhile, near-term investor interest rate expectations were without change. According to CME’s FedWatch Tool, as of November 13th, investors saw a 100.0% chance of the Federal Reserve keeping borrowing costs at the current 0%-0.25% level at its policy meeting on December 15th-16th, or unchanged compared to November 12th.

Daily Pivot Levels (traditional method of calculation)

Central Pivot – $1,874.55
R1 – $1,886.31
R2 – $1,895.64
R3 – $1,907.40
R4 – $1,919.16

S1 – $1,865.21
S2 – $1,853.46
S3 – $1,844.12
S4 – $1,834.79