• 278 days Will The ECB Continue To Hike Rates?
  • 278 days Forbes: Aramco Remains Largest Company In The Middle East
  • 280 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 680 days Could Crypto Overtake Traditional Investment?
  • 685 days Americans Still Quitting Jobs At Record Pace
  • 687 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 690 days Is The Dollar Too Strong?
  • 690 days Big Tech Disappoints Investors on Earnings Calls
  • 691 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 692 days China Is Quietly Trying To Distance Itself From Russia
  • 693 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 697 days Crypto Investors Won Big In 2021
  • 697 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 698 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 700 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 701 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 704 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 705 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 705 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 707 days Are NFTs About To Take Over Gaming?
U.S Targets Russian Gold Stockpiles

U.S Targets Russian Gold Stockpiles

In its latest round of…

Gold Bulls Are Facing An Uphill Battle

Gold Bulls Are Facing An Uphill Battle

Last year proved to be…

  1. Home
  2. Commodities
  3. Precious Metals

The Gold Rally Has Finally Run Out Of Steam

Gold Rally

This year has been proving to be a gold speculator and investor’s dream after the yellow metal rallied hard to hit historical highs thanks to a perfect storm of  a global pandemic, massive government stimulus packages, weakening dollar and a stock market bull run that had finally run out of gas. The torrid rally represented the sharpest gain the metal has mustered in more than a decade. Wall Street hedge funds have been extremely bullish on gold, with some eyeing prices of $3,000 and even $5,000 per ounce.

To wit, Bank of America Merrill Lynch said that it expects gold to hit $3,000 by early 2022 while Citigroup and billionaire Thomas Kaplan, founder of New York-based asset management firm Electrum Group, believed that $5,000 was in the cross hairs.

But now there’s growing evidence that the gold rally could be done for now, and those lofty targets will remain out of reach for gold punters.

Gold prices have pulled back 13% after touching an all-time high of $2,075 in August, as a barrage of potential Covid-19 vaccine candidates continues to give the world hope that the worst could be in the rearview mirror.

Vaccine optimism

At least two successful COVID-19 vaccines now mark a major turning point in the battle against one of our biggest existential crises.

Two weeks ago, Pfizer (NYSE:PFE) and BioNTech (NASDAQ:BNTX) reported that their joint mRNA-based COVID-19 vaccine candidate, BNT162b2, had demonstrated nearly 95% efficacy in preventing Covid-19 infections in ~44,000 test patients. A few days ago, the companies confirmed those numbers in their final analysis, including being 94% effective in those over 65 years old.

The good news came with a small caveat though: The Pfizer's vaccine needs a much cooler temperature of -94 degrees Fahrenheit (-70° C) and up to -109 degrees Fahrenheit for shipment for the vaccine to remain viable, which could pose a major challenge in some locations.

So news that Moderna’s (NASDAQ:MRNA) Covid-19 vaccine candidate, mRNA-1273, has demonstrated similar efficacy as the Pfizer vaccine but remains stable at more manageable temperatures of 2° to 8°C (36° to 46°F), or roughly the same operating temperature of a standard home or medical refrigerator, for at least a month, was definitely great news.

More encouraging: Moderna has reported that its Covid-19 vaccine will cost $25 and $37 per dose depending on the amount ordered, roughly in the ballpark of a common flu shot which costs $10 and $50.

Even more encouraging news: The EU is likely to fast track approval for the Pfizer and Moderna vaccines, meaning they could enter mainstream distribution in its jurisdiction in a matter of weeks. Europe is experiencing the biggest second Covid-19 wave with Germany, Poland, France and Spain having gone back to lockdown in a bid to stem the spread of the deadly virus.

Related: Russia Aims To Become World's Top Gold Producer

Whereas the Pfizer and Moderna vaccines are based on Messenger RNA technology, which is not only speedier to manufacture and develop, but is also well-suited to rapid adaptation.

Unfortunately, messenger RNA, or mRNA, is also delicate, requiring careful cold storage and handling that complicate distributions.

The great news: There are several other vaccines that could be better suited for more widespread distribution.

AstraZeneca (NASDAQ:AZN) and the University of Oxford have reported that their vaccine is 62-90% effective depending on dosage, but is cheaper than the Pfizer or Moderna vaccine and can also be stored at higher temperatures making it more accessible for lower income nations. The AstraZeneca candidate is an adenovirus-vector platform that gives people an inactivated virus to stimulate an immune response making it more stable than Pfizer and Moderna's "mRNA-based" vaccines.

CureVac's (NASDAQ:CVAC) says its CVnCoV vaccine is stable for three months at +5 Celsius, or the standard refrigerator temperature. The vaccine remains stable for up to ready-to-use room temperature for 24 hours.

Sanofi and GlaxoSmithKline's have announced that their two-dose recombinant protein vaccine can be stored between 2°C- 8°C.

Johnson & Johnson also has a Covid-19 vaccine in the pipeline, which, if successful, could be stable at refrigerated temperatures of 2°C - 8°C for at least three months and up to two years at -20 °C.

In short, there seems to be no shortage of Covid-19 vaccine candidates that are potentially even more stable than the Pfizer/BioNTech vaccine.

Gold price to watch: $ 1,800

With the short-term gold momentum decisively skewed to the downside,Chris Vermeulen Chief Market Strategist Technical Traders has advised traders to keep an eye on the pivotal $1,800 price level. This support level could be tested before the next big upleg, but could also open the floodgates for gold to fall as low as $1,600 if it fails to hold.

With gold prices currently hovering slightly above this critical support level, the bulls will be hoping that things don’t fall apart completely.

By Alex Kimani for Safehaven.com 

More Top Reads From Safehaven.com:

Back to homepage

Leave a comment

Leave a comment