On Monday (November 9), starting from 19:00, spot gold began a seemingly endless decline.
Spot gold first plummeted by US$50 within half an hour, then continued to turn downward after a period of calm, and then fell below the US$1,870 mark, down more than US$90 from the daily high, and fell by more than 4% during the day. Spot silver plummeted 6%, approaching $24 per ounce; COMEX silver futures also plummeted, falling 5.03% during the day. Shanghai gold fell 3.8%, and Shanghai silver fell 5%.
The continued decline of gold is mainly due to the following four major reasons.
Risk preference has shifted, gold has become a sacrifice
It can be seen from the changes in major assets that market risk preference has shifted. The gains of the two oils continued to expand on Monday night, with WTI crude oil futures soaring 11% to stand at US$41/barrel; Brent crude oil futures also rose by more than 10% to US$43.4/barrel. After the opening of internal futures, crude oil prices rose by 7%.
Speeches by OPEC+ energy ministers on Monday night also contributed to the optimism of crude oil bulls. OPEC+’s “big brother” Saudi Oil Minister said that if necessary, OPEC+ can adjust the production reduction agreement, and OPEC+ may extend the production reduction agreement to the whole of 2022.
European and American stock markets also continued to rise. Germany’s DAX index rose by more than 6%, France’s CAC40 index rose by more than 7%, Spain’s IBEX35 index rose by more than 9.4%, and Italy’s FTSE MIB index rose by more than 6.1%. S&P 500 E-Mini futures hit a record high, while Dow futures rose more than 5%. FTSE Russell 2000 futures triggered a circuit breaker upward. Hang Seng Index futures rose by 2.15% in night trading.
Goldman Sachs strategists Dominic Wilson and Vickie Chang wrote in a report released on Sunday (November 8): “Potential vaccine news in the next few weeks may be the next key risk point. ” They noted that initial news about a vaccine could cause the market to rise sharply from current levels.
Stuart Oakley, head of foreign exchange trading at Nomura, also previously pointed out: “If a vaccine is developed, we will see all the pent-up demand released.”
In addition, judging from the fluctuations of the Nasdaq spot index, JPMorgan Chase said that many call option spread buyers in early October have not yet returned. Once this group of people is attracted, the gamma effect they can produce will be a huge impetus to the rise of US stocks.
It is reported that a vaccine prevents 90% of new coronavirus infections
The most direct trigger for the shift in risk preference is tonight’s discussion about vaccines. then progress. Evening market news revealed a piece of good news – in a large-scale study, the new crown vaccine jointly developed by Pfizer and BioNTech prevented 90% of new crown infections. This is the most encouraging scientific development yet in the fight against coronavirus.
The preliminary results pave the way for pharmaceutical companies to apply for emergency use authorization from regulators, eight months into the worst outbreak in a century. This research result is based on an interim analysis of 94 people infected with the new coronavirus (this trial has a total of 43,538 volunteers, 42% of whom are from different regions, and a total of 94 infections have occurred so far).
If the data holds, it could mean the world has a vital new tool to control an epidemic that has killed more than 1.2 million people worldwide. William Gruber, Pfizer’s senior vice president of vaccine clinical development, said this is probably the best news for the world, the United States and public health.
BioNTech CEO Ugur Sahin said that the effectiveness of the first batch of vaccines was previously expected to be between 60% and 70%, and that exceeding 90% is an amazing progress. Sahin said in an interview that this shows that the epidemic can be controlled, which is a victory for science. There is confidence that the immune response to the COVID-19 vaccine will last for at least a year, although this is still uncertain.
However, he also admitted that the data has limitations. Details about the vaccine’s efficacy are still unclear, and it’s unclear how effective it will be in key populations such as the elderly. It’s unclear whether the vaccine can prevent severe disease because there were no people with severe infection in this round of trials. Pfizer CEO said late Monday that research on a new coronavirus vaccine should be completed by the end of the month.
Moderna Inc. is also developing a vaccine using similar technology, and if that study is also successful, the U.S. could have two vaccines available around the end of the year. Pfizer expects to have two months of safety tracking data, a key metric required by U.S. regulators before emergency authorization approval, in the third week of November. If these data find no problems, Pfizer will apply for authorization in the United States this month.
The companies said they should be able to produce 1.3 billion doses of vaccine by the end of 2021, enough to vaccinate 650 million people, but only 50 million doses are expected to be available in 2020. The vaccine relies on messenger RNA technology, which has never been used in an approved drug before. Unlike the AstraZeneca-Oxford vaccine, the Pfizer-BioNTech vaccine relies on mRNA technology, which effectively encodes immunity to the virus directly into In human genes, human cells become vaccine factories, allowing them to be developed much faster than traditional vaccines.
The Golden Ten VIP risk warning report pointed out last Friday that in the last two months of 2020, news related to vaccines in the United States is expected to follow one after another, which will��Gold, U.S. stocks and other assets bring asymmetric risks. Investors need to pay attention to the following timetable.
Biden’s victory is almost certain
In addition, Biden’s victory is almost certain to support the market’s optimism about epidemic control. The stock market was already in a state of excitement after the political news broke last weekend that Biden was elected president of the United States. U.S. Treasury yields reversed course as investors anticipated that the reflation trade might eventually be unleashed if the coronavirus pandemic is defeated, with the 10-year Treasury yield soaring as much as 14 basis points to a daily high of 0.9338% before falling back to 0.91%.
The current market expects that after Biden takes office, he will intensify efforts to control the epidemic, so optimism is rising. According to Fox News, Biden said during his national speech on the 7th that he would announce a 12-member COVID-19 response task force on the 9th local time.
In addition, according to reports from many mainstream media in the United States, Democratic presidential candidate Joe Biden and Vice Presidential candidate Kamala Harris were elected as president-elect on November 8, local time in the United States. Establish a transition website. The website announced that vaccines will be distributed fairly and efficiently. This includes investing $25 billion to ensure that every American can receive free vaccinations and putting scientists in charge of all decisions involving safety and effectiveness.
The risk of a hard Brexit is reduced
On Friday, British Prime Minister Johnson said that the Brexit agreement will be reached and that the UK is fully prepared for Brexit. . According to a statement issued by the British Prime Minister’s Office and content posted on social media by European Commission President Ursula von der Leyen, the two sides stated during the call that despite some progress in recent negotiations, major differences still exist in some areas, involving fair competition and fisheries issues. wait.
According to Xinhua News Agency, Johnson discussed the latest progress in trade negotiations with Von der Leyen on the 7th and decided to continue negotiations in London this week. As the mid-November date approaches, this round of UK-EU negotiations is believed to be extremely critical.
In summary, multiple factors including vaccine progress, Biden’s advantage, capital return to U.S. stocks, and reduced Brexit risks have exacerbated the decline in gold prices, but gold’s bullish trend It has not been broken yet, especially in the current sharp drop in gold prices. The U.S. dollar index, which had previously shown a strong correlation with gold, did not rise as a result, and the intraday trend was basically flat. This trend deserves the attention of investors. </p
