Spot Gold was on track to register its third consecutive week of decline, as market players weighed optimism over the timing of COVID-19 vaccines’ arrival against some concerns over the effectiveness of a leading vaccine candidate.
AstraZeneca was faced with some tough questions regarding the success rate of its vaccine, which brought forth certain doubts over rapid regulatory approvals in Europe and the United States.
“For the markets, I don’t think that changes the perception that there’s going to be a vaccine sooner than previously expected,” IG Markets analyst Kyle Rodda said.
According to Rodda, investors are starting to consider the prospect of economic recovery gaining momentum in 2021, and thus, they are prompted to trim gold holdings.
On the other hand, according to Jeffrey Halley, a senior market analyst at OANDA, the yellow metal could hit new record highs next year, since the Federal Reserve will probably cap rate hikes in the longer end of the yield curve and the US Dollar will be substantially weaker. Lower rates tend to cut the opportunity cost of holding gold.
As of 10:40 GMT on Friday Spot Gold was edging down 0.13% to trade at $1,808.15 per troy ounce, while moving within a daily range of $1,802.93-$1,813.87 per troy ounce. The yellow metal looked set for its third consecutive week of losses, being down 3.36%. The commodity has retreated 3.75% so far in November, following another 0.35% drop in October.
Meanwhile, Gold futures for delivery in December were inching up 0.05% on the day to trade at $1,806.40 per troy ounce, while Silver futures for delivery in December were down 0.52% to trade at $23.240 per troy ounce.
The US Dollar Index, which reflects the relative strength of the greenback against a basket of six other major currencies, was inching down 0.09% to 91.91 on Friday, while hovering just above Thursday’s almost three-month low of 91.85.
Near-term investor interest rate expectations were without change. According to CME’s FedWatch Tool, as of November 27th, 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 25th.
Daily Pivot Levels (traditional method of calculation)
Central Pivot – $1,811.56
R1 – $1,817.25
R2 – $1,824.03
R3 – $1,829.73
R4 – $1,835.43
S1 – $1,804.78
S2 – $1,799.08
S3 – $1,792.30
S4 – $1,785.52