Gold back above $2,000 following Russian vaccine claims
Gold back above $2,000 following Russian vaccine claims by Michael Pinson for Bullion by Post
After a pullback last week, gold has rebounded and is once more above $2,000 per ounce as investors continue to react to changing pandemic news.
News last week of a potential vaccine in Russia, triggered a sell-off for gold and silver that saw both precious metals drop to monthly lows, as optimistic investors grabbed onto hopes of a potential quicker recovery than expected.
As medical experts globally cast aspersions on how safe the Russian vaccine could be given the lack of testing however, these hopes quickly evaporated, and gold and silver saw prices recover somewhat.
Poor GDP results from Japan over the weekend, as well as the postponement of trade talks between China and the US, have reinforced the economic conditions supporting the case for precious metal investors. Strong trading overnight saw gold climb back above the recent milestone of $2,000 per ounce to a weekly high of $2,015.89 so far today.
The price of gold in USD for the past month, showing last weeks dip, and this weeks recovery.
A correction had been expected for a while given the impressive gains both gold and silver have made in the past few months – a momentum that could only be maintained for so long. Their ability however to halt the sell off so quickly, and then make a recovery in just a few days is further proof of the supportive global conditions for safe haven investments.
A vaccine will take time to test fully, and then even longer to produce in the numbers necessary for an effective vaccination program. With a Chinese vaccine announced to cost £110 for just two doses, there will also be a question of whether governments will be able to afford largescale vaccine programs following the already sky-high costs of the pandemic response so far.