By Barani Krishnan
Investing.com – Bears who thought of doing “another Pfizer ” on gold have been in for a surprise.
Short sellers who ravaged the yellow metal last week on the blockbuster results of Pfizer’s Covid-19 vaccine trials tried to repeat the stunt Monday when Moderna Inc (NASDAQ:) announced even better efficacy from its own coronavirus test shots. Gold did dive on the Moderna news, but rebounded quickly this time, to actually end the day slightly higher — unlike the near 5% plunge on the Pfizer Inc (NYSE:)announcement that prevailed through most of last week.
For context, Moderna said its experimental vaccine was 94.5% effective in preventing COVID-19, versus Pfizer’s 90% efficacy. The Moderna product also needs just regular refrigeration versus the -90 Fahrenheit needed for what Pfizer has developed.
In Tuesday’s trade, settled down $2.70, up 0.1% at $1,885.10. This was despite rival losing some 0.25% of its value — a dynamic that would have normally boosted gold.
The , which reflects real-time trades in bullion, was down $2.36, or 0.1%, to $1,886.55 by 2:57 PM ET (19:57 GMT). The action has, undoubtedly, left gold bears, even long-term watchers of the precious metal, nonplussed.
“XAU/USD trades within a tight $1,885-$1893-ish range despite a softer USD,” gold chartist Joel Frank said in a post on FX Live, using the trading symbols of bullion and the dollar.“
Gold traders continue to weigh conflicting themes of increasing vaccine optimism versus the worsening of the pandemic/more accommodative central banks, he added.
Craig Erlam, analyst at OANDA in New York, concurred that gold was giving away little in the current round of the vaccine games that made it difficult to get a read on the haven’s direction.
“A softer dollar in recent days has alleviated some of the pressure on gold but it’s still struggling to pull itself considerably off its lows,” Erlam said in a note. “Once again, the yellow metal found support around the $1,850-1,860 region but it has since struggled to break back above $1,900. Perhaps this is a new short-term range that’s emerging for gold.”
Some analysts are now casting the ball as far forward as Jan. 5 — the date for the two Senate run-offs in Georgia that Democrat lawmakers need to win if President-Elect Joe Biden is to pass a Covid-19 stimulus large enough to boost gold prices like a previous fiscal relief in March.
Biden pressed Congress on Tuesday to approve a $3.4 trillion stimulus plan to keep people and businesses afloat as virus cases spiked nationwide. Even so, there were no negotiations for a new stimulus plan between Republicans and Democrats on Capitol Hill, with the gridlock looking to stay until the Jan. 5 Georgia run-offs at least.
Congress passed roughly $3 trillion in March under the Coronavirus Aid, Relief and Economic Security (CARES) Act to provide grants and loans to U.S. businesses and paycheck protection to qualifying citizens and permanent residents.
Since then, Democrats in the House of Representatives have been locked in a stalemate with Senate Republicans on a successive package to the CARES, arguing over the size of the next relief, as thousands of Americans, particularly those in the airlines sector, risk losing their jobs without further aid.