Market Overview

With Coronavirus Vaccine In Reach, Gold Faces Worst Month In 4 Years

With Coronavirus Vaccine In Reach, Gold Faces Worst Month In 4 Years

The announcement of a vaccine protecting against COVID-19 has seen investor risk appetite rise, sending safe haven assets, including gold and the U.S. dollar, lower. 

The yellow metal is on track for the worst month in four years after trading at around $1,800 since mid-July. On Monday, gold was trading at $1,776.

The price of gold will rise a touch as U.S. real yields fall a little further, said Capital Economics assistant commodities economist Samuel Burman.

The withdrawal of fiscal stimulus in China will offset any vaccine-induced boost to metals demand in 2021, the economist said. 

Is Gold’s Bull Market Over? The gold industry is exceptionally strong and is attracting both growth-oriented and value investors, says Fosterville South Exploration CEO Bryan Slusarchuk.

It is one of the few sectors in the world that has a strong outlook for growing cash flows and growing margins in the year ahead, he said. 

The macro setup for gold represents a once-in-a-lifetime opportunity for gold bulls, and it should be pointed out that when gold bullion prices are strong, gold equities often outperform the price of the metal itself, Slusarchuk says. 

"While 2020 will be rightfully remembered for the terrible pandemic that ripped across the globe, it also marks the first time that there was near worldwide consensus amongst politicians from all political parties as it relates to spending and bigger government as a solution to cure all economic ills.”

Price Action: The SPDR Gold Trust (NYSE: GLD) lost 0.67% Monday, closing at $166.67. 

The VanEck Vectors Gold Miners ETF (NYSE: GDX) gained 1.31%, closing at $34.68.

Related Link: Should You Invest In Gold Right Now?


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