Gold Keeps Steady at $1,885, while the EUR/USD Hovers at 1.1850
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- Gold Reserved as Vaccine Developments Emerge
- EUR/USD remains in its comfort zone
Gold Reserved as Vaccine Developments Emerge
In wake of the Moderna vaccine news, the Gold market kept its resiliency and remained reserved. With sights on the development of a Covid-19 vaccine, Gold traded sideways during Monday & Tuesday trading. The price dropped $24 from opening to low as a reflex on the news. Nevertheless, it was able to quickly erase the losses and recover back to opening levels. In comparison, Gold bugs witnessed a stunning $115 drop from a high of $1,965 to a low of $1,950 on the Pfizer news release a week ago.
As it became clear yesterday, Moderna Inc presented the second vaccine candidate with a higher efficacy rate and favorable storage conditions. The Moderna vaccine aims at a success rate of 94.5% and above and can be refrigerated in normally cold temperatures of 2C to 8C. In comparison, the Pfizer vaccine was said to be 90% effective.
Gold is currently trading at $1,887 and it continues to keep steady sideways pacing as market participants appear to have set their gaze upon new updates by the biotech companies hunting for a vaccine.
In the medium-term, Gold has been trading within the $1,950 to $1,850 range. A consolidation that on the one side reflects an uncertain global environment, lockdowns and lack of fiscal stimulus. While on the other side is the vaccine optimism, stimulus deal and the gradual return of social activity and economic recovery.
In the long-term, Gold has posted a 30% rebound to the current market price from the lowest levels in March. However, Gold’s price has been declining since it hit the all-time high on Aug 7, a historical record of $2,076. Since then the precious metal’s price range has been narrowing leading up to the current rangebound motion.
EUR/USD Remains Hopeful
Similarly, the EURUSD is also on team consolidation as the pair has been caught in a range of 1.1610 to 1.1910, a comfort zone since late July this year. Last week, as the news broke from Pfizer, the major reacted to the downside. Though it barely budged in light of Moderna progress yesterday. The US dollar has been out of favor recently as US equities and risk assets were significantly boosted by vaccine hopes, while the Greenback depreciated across the board.
In the long-term, the EUR/USD has come a long way since its lowest point on Mar 22 when the pair was trading at a low of 1.0635. So far, the pair has bounced back 30% to its current market price. The EUR/USD is trading in positive territory for a fourth consecutive day on Tuesday as traders and investors keep their vaccine hopes up.
How have Other Markets Reacted to the Vaccine Developments?
The market has been highly volatile in its intraday wild reactions to news and updates either by governments or by pharmaceutical companies. So, it remains to be seen if a red European market opens today with blue-chip indexes trading flat to negative, while US stock futures point to a moderately lower open a day after the Dow skyrocketed by 470 points to close at 29,950, beating the all-time high on Feb 12. Both the DJIA and the S&P500 have posted a breakneck rebound from the pandemic lows in March, as both benchmark indexes have climbed over 60% since the lowest point on Mar 23.
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