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Metals Stocks: Gold prices head for first back-to-back loss in 3 weeks

Gold futures on Wednesday trade modestly lower and head for the first consecutive decline since late October, as global stocks are bolstered by the latest update on coronavirus treatments and prophylactics. Read More...

Gold futures on Wednesday traded modestly lower and headed for the first consecutive decline since late October, as global stocks were bolstered by the latest update on coronavirus treatments and prophylactics.

Early Wednesday, Pfizer Inc. PFE, +1.84%  said its COVID-19 vaccine candidate developed with BioNTech SE BNTX, -5.01% was 95% effective in a final analysis of clinical trial data, providing an even more optimistic update on progress toward a bulwark against the deadly disease.

The news comes amid a resurgence of the pathogen — the global tally for confirmed cases of the coronavirus that causes COVID-19 climbed to 55.7 million on Wednesday, according to data aggregated by Johns Hopkins University, while the death toll rose above 1.3 million — but also follows fresh news earlier in the week of progress toward a vaccine by Moderna MRNA, -4.90%, which also claimed a high level of efficacy in late-stage trials.

December gold GCZ20, -0.57% declined by $11.70, or 0.6%, to trade at $1,873.40 an ounce, a day after a 0.1% fall. A decline on Wednesday would mark the first back-to-back loss for gold since the two-day slide ended Oct. 29, according to FactSet data.

“In the last few days we have seen a general decline in volatility, which has also been reflected on gold with the price steady at $1,880, waiting for new market drivers,“ wrote Carlo Alberto De Casa, chief analyst at ActivTrades, in a daily note.

Silver futures for December delivery SIZ20, -0.71%, meanwhile, shed 22 cents, or 0.9%, to trade at $24.44 an ounce, following a 0.6% decline on Tuesday. Silver futures hasn’t seen consecutive losses since the three-session period ended Oct. 26.

Metals prices pared losses slightly early Wednesday after economic data showed that housing starts climbed 4.9% in October to 1.53 million annual rate, while building permits held steady on the month at a 1.55 million annual rate, suggesting some stall in economic activity.

Bullish investors still believe that gold’s longer-term pathway is higher, buttressed by expected stimulus from central banks and fiscal measures by governments to avert a COVID-19 public-health disaster.

Successful vaccines and remedies for the infection may not reach wide-scale distribution for several months and millions of people are still suffering from the economic effects of social-distancing and lockdown measures that have been reimposed in parts of the U.S. and in other parts of the world, metals dealers say.

“We are seeing an interesting challenge between the risk on, which is still dominating markets and is a bearish element for gold, and the overall uncertain scenario, with central banks still forced to print money and the continued presence of Covid-19 ensuring the economic damage will last for a long time,“ De Casa wrote.

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