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Original title: Gold 390 yuan / gram of support efficacy to be tested Source: Original
Long-short rocker
The US elections have had twists and turns, and global financial markets have fluctuated wildly.Gold priceGrid came out of a wave of early ups and downs. In early November, the US general elections and the European epidemic fueled market risk aversion. The US dollar index fell to its lowest level in two years. European and US central banks maintained expectations of easing. Gold prices rose sharply. COMEX gold reached a new record of $ 1966 per ounce. However, in mid-November, the US general election entered a tug of war. News of the progress of the new corona vaccine spurred the rise in global market preferences, risk assets collectively increased, and safe-haven assets showed a downward trend. The US dollar index bottomed out and the price of gold fell. COMEX gold fell below $ 1,900 / Ounce, once it fell to $ 1,848 / ounce, the Shanghai 201 gold contract on the domestic disk also fell below the 400 yuan / gram mark.
New Advances in Vaccine Development
Recently, news of new developments in the development of new corona vaccines has hit the market. Pfizer Pharmaceuticals said that the new corona vaccine developed by the company and BioNTech has reached 90% effectiveness in the third phase of the trial. Fueled by news of the new crown vaccine, the market’s willingness to risk has increased and safe-haven assets have been affected. However, as the market digests the vaccine news, gold prices have stabilized. Institutional holdings show that institutions have withdrawn their safe haven assets. SPDR gold ETF holdings have fallen significantly in the past week. This week, they have lightened their positions by 26 tonnes to 1,234 tonnes.
Starting from the premise that the effectiveness of the vaccine is confirmed, the impact of the vaccine on the gold market is manifested in: On the one hand, with the escalation of the epidemic situation in Europe and the United States, the key progress in the Vaccine research and development has played a role in controlling the growth of new confirmed cases and promoting global economic recovery. The key role is that market expectations for the global economy will change, and the global economy will gradually recover as consumer demand is released and the lives of residents are on track; on the other hand, news of key developments in vaccine research and development has boosted market sentiment. Assets will enter a readjustment stage. Under the expected economic recovery, risk assets will be boosted, while safe haven assets will be under pressure to some extent.
Vaccines may have to wait until early 2021 and storage of vaccines faces technical problems. At the same time, the arrival of winter has meant that the epidemics in Europe and the United States are still in a period of high incidence. In the short term, vaccines are unlikely to have a substantial impact on the global economy. After digesting the news related to vaccines, the price of gold will reset.
Demand for short-term coverage remains strong
Although many US media reported that Biden has won more than 270 electoral votes, the final result of the general election has yet to be announced. US President Trump questioned the election results in the six major states. Subsequent US general elections may trigger Supreme Court intervention and the final result may be delayed for a long time, which is sure to bring volatility to the US dollar and gold markets. In addition, the global number of new coronavirus infections is increasing, the epidemic situation in the United States and Europe is simultaneously intensifying, the economic outlook for the United States is still uncertain, the Trump administration withdraws from fiscal stimulus negotiations, negotiations between Britain and Europe are pending and there are uncertainties in global geopolitics. Overall, the epidemic, the uncertainty of future central bank policies, and the risks at the end of the United States general election have kept demand for hedging strong, which in turn has driven the market for precious metals.
panorama
The news about the elections and vaccines in the United States dominated market sentiment and safe-haven assets stabilized after falling. The tail risks of the US general election have yet to be released, and the epidemic in Europe and the United States has recovered, and the demand for coverage remains strong. In the short term, with the market oscillating, the 2012 Shanghai Gold contract focuses on the effectiveness of the support from the previous low of 390 yuan / gram. Before breaking the support line, it shouldn’t be too bearish.
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