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Summary
- Gold prices have been on a slow decline as soon as the news of positive development on vaccine front emerged.
- Worldwide economic slump and the gold’s value as a safe asset had led to the rise in its prices.
- Gold prices are gained 22 per cent this year. However, since November 1, the prices have slumped by 2.7 per cent.
Gold prices witnessed a spectacular rise this year. The yellow metal touched its highest point of US$ 2000 on July 28, 2020. Throughout the month of August, it flirted with the US$ 2000-mark, at times crossing the level. As stock markets crashed worldwide amid the pandemic, investors sought refuge in the safe metal, leading to a 22 per cent price gain in gold prices this year.
However, as soon as the news of positive development on vaccine front emerged last month, gold prices became inconsistent and have embarked on a slow decline. Since November 1, gold prices have slumped by 2.7 per cent.
The fall began after pharma giant Pfizer and its research partner BioNTech announced that their COVID vaccine has 90 per cent efficacy in preventing the virus on November 10. Soon after, Moderna and AstraZeneca-Oxford University announced positive results from their COVID vaccine trials.
Ahead of the mass scale immunization efforts worldwide, the first COVID-19 vaccination was executed in the United States on Monday. The gold prices slumped by 0.59 per cent on the same day.
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Impact Of Vaccine Development On Gold Prices
Among a host of factors that led to the rise in gold prices, the primary was the worldwide economic slump and the metal’s value as a safe asset.
However, with the recent positive developments from multiple sources on the vaccine front, things are beginning to look up. On December 2, the United Kingdom became the first country in the world to approve the Pfizer-BioNTech vaccination for mass use. The United States and Canada soon followed suit.
Mass inoculation formally kicked off on Monday. The vaccines are currently being rolled out in multiple countries.
Canada received its first batch of Pfizer-BioNTech COVID-19 vaccines on Sunday, December 13, with the first 30,000 doses reaching 14 provinces across the nation a day after. The country will receive a total of up 249000 doses by December 31, said Canadian minister of public services and procurement Anita Anand.
The first Canadian to be inoculated was an 89-year-old Gisèle Lévesque, resident of a long-term care home, multiple news outlets reported. Toronto-based personal support worker Anita Quidangen was also among the first people in Canada to be vaccinated, tweeted Prime Minister Justin Trudeau.
With the rollout of the vaccine, gold prices have begun coming under pressure. Investors’ are dumping gold assets in favor of riskier stocks and securities.
Despite the positive developments in the fight against coronavirus, the world is not yet “out of the woods”.
Gold prices may continue to tick up amid a resurgence of COVID cases worldwide. However, this uptick is likely to be at a much slower pace and time-bound due to the vaccine rollouts.
