By Adam Claringbull
Investing.com – Gold was down on Thursday morning in Asia as Pfizer Inc (NYSE:) announced safety data to advance its vaccine to the U.S. Food and Drug Administration (FDA) approval stage and the firmed.
were down 0.44% at $1,865.65 by 12:21 PM ET (4:21 AM GMT). The dollar was up on Thursday morning.
A strengthening greenback has helped diminish appetite for gold, with the dollar rising as investors move from stocks to the more risk-averse asset. A stronger dollar makes gold more expensive in other currencies.
Adding to the downward pressure on the yellow metal is news from the Pfizer/BioNTech (F:) vaccine team that they have sufficient safety data to advance their vaccine candidate to the U.S FDA for emergency use approval within days.
“(Vaccines) seem to be progressing quickly and there are several others also in the pipeline … that should help the global economy recovery and be net bearish for gold. But in the meantime, the fact that we’re not out of the woods yet and need more stimulus seems to be offering some support,” ED&F Man Capital Markets analyst Edward Meir told Reuters.
The vaccine news helped counteract the upward price driver of the ever-growing COVID-19 pandemic, as it brings some medium- to long-term positivity to global markets and reduces the appetite for the safe-haven metal in the longer term.
“The rollout of positive vaccine developments is reducing gold’s lure as a safe-haven. (Although) it still seems to be in a trading range, the big moves up seem to be finished for now,” Meir added.
Despite the bearish outlook, there is still plenty of impetus pushing the previous metal up. The COVID-19 pandemic is worsening rapidly, especially in the economic powerhouse regions of the U.S. and Europe; global cases have now reached over 56 million, with the U.S. accounting for nearly one fifth of them, according to Johns Hopkins University data. Europe, too, is experiencing a rise in cases not seen since the first wave, leading to large-scale lockdowns on public activity, and hence to strongly weakened economic activity.
The U.K. and the E.U. are fast running out of time to reach a trade deal before the transition period for the U.K. leaving the economic bloc expires on Jan. 1, 2021. Talks appear to still be deadlocked over multiple issues.
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