Vaccine Optimism Weakens Gold’s Safe Haven Appeal

Gold prices are slipping lower as rising hopes for vaccines to tackle the coronavirus pandemic weaken the safe haven appeal of the yellow metal in global markets. At the time of writing, GOLD is trading at a little above $1,859.

Encouraging reports about Pfizer’s vaccine were followed by similar reports from Moderna’s vaccine’s late stage trials as well, raising hopes that a vaccine could soon be ready for mass distribution. Latest news reports indicate that Europe and the US could be gearing up to grant emergency authorization for Pfizer’s vaccine to begin distribution as soon as next month.

Losses in gold, however, remain limited due to a weakness in the US dollar, which makes it more affordable for holders of other currencies to purchase the precious metal. Weak economic data from the US which released in the past few sessions are also lending some support to the safe haven metal for now.

Gold has also benefited from a tempering in the market sentiment as optimism about the vaccine comes under pressure over the continued increase in the number of fresh infections, hospitalizations and deaths in several parts of the US and the world. The possibility of governments announcing more lockdowns which could hamper economic recovery is also driving interest in the yellow metal.