Profit taking and sell off has continued on Gold, as investors shift attention from safe haven to risk assets. On Tuesday, bullion posted its steepest decline in over seven years, due to sharp fall in Gold futures.
The yellow metal which thrives in uncertainty saw sell off on Tuesday which has extended to Wednesday, on the optimism of a vaccine in addition to drop in U.S Covid-19 hospitalizations and falling number of new cases.
On Tuesday, Russia became the first country in the world to approve a vaccine, against the coronavirus that cause Covid-19, signaling hope to the end of the pandemic. In addition AstraZeneca Plc and Moderna Inc are currently conducting the final stage trial for their respective vaccines.
Gold price soared on the back of Covid-19 pandemic, enjoying multi week rally and breaking several records, surging above $2,000 per ounce.
At 7:08GMT on Wednesday, December Gold GCZ20 is down by 1.37% and it is selling at $1,919.70. However spot Gold is up by 0.10% and it is selling at $1,914.25
“Traders who were looking for an excuse to lock-in profits with their bullish gold bets jumped all over the Russia’s vaccine news,” said Edward Moya, senior market analyst at Oanda. “It didn’t matter that this was somewhat telegraphed or that the Russians have only begun the Phase 3 trials,” the analyst said, adding that gold “was ready for a selloff.”
“10-year Treasury note TMUBMUSD10Y, 0.652% were up by more than 7 basis points at 0.65%, on Tuesday, reflecting diminished appetite for safe-haven assets like bonds and precious metals and into assets perceived as riskier like stocks. Yields rise as bond prices fall,” according to Market Watch.
“Gold and silver’s run over the past couple of weeks was dizzying in its trajectory and just about everyone marveling at that rise was expecting, and even hoping for, a correction,” said Brien Lundin, editor of Gold Newsletter. “Well, it’s here, and the metals are simply releasing a bit of the air that had overinflated the market.”
Written by;
Ifunanya Ikueze
