The metal commodities are in another labyrinth ignited by optimism on vaccine development combined with the smoother-than-expected transition to Biden administration.
Gold drops to its lowest in four months amid these successive setbacks.
For the record, the yellow metal is one of the biggest gainers during the pandemic. It rallied as much as 25% so far.
It hit above the $2,000 per ounce threshold in August, a level which investors have never seen before.
Now that risk-on sentiment yet again dominates, traders are fleeing as fast as they can away from the non-yielding asset and towards stocks and equities.
In the latest charts, the spot gold price is at $1,826.47 after shedding off 0.6%. This is the metal’s lowest cap since July where it traded at $1,829.42.
Consequently, the futures contract followed the downward pressure after shedding off 0.90%. The price per ounce is at $1,821.25.
Silver is not doing any better. It dropped as much as 1.1% along with the bullion.
On the other hand, platinum rose by 0.5%, while palladium remained steady.
Along with the positive news on pharmaceutical’s advance towards the long-awaited Covid-19 inoculation, former president Trump gave his green light to the official transition on the presidential seat to Biden.
This development came unprecedented as the leader is quite vocal on his adamant stance to give the next seat taker of the White House a hard time.
The announcement provided further support to the already strong risk sentiment in the market.
This started a renewed confidence among investors where calmer trading days decreased their appetite for safer assets.
Silver Price Forecast
Meanwhile, analysts are less optimistic on silver price as the metal continues to record lukewarm performance since the beginning of the week.
The bullion’s sister failed to claw back to its nearest resistance threshold of $24.40 and is now trading near the support level of $23.90 per ounce.
The weak performance of both metal commodities came as a surprise as the USD index fell against other entities in the basket of currencies today.
Normally, a weak dollar performance provides needed support for commodities. Such is not the case this time.
The pressure brought by vaccine news eclipsed what could be a bullish run for both contracts.
In the latest charts, the gold/silver ratio is testing the resistance level from a 50-day EMA at $77.90.
According to analysts, any move above this level will result in a negative blow, especially for the lustrous commodity.
