Possibility of Coronavirus Vaccine Discovery Causes Gold Price to Wobble

Gold and other precious metal prices had shot up when the pandemic struck due to several restrictions from different countries. However, the prices have started fluctuating as several researchers globally are giving a ray of hope in coming up with a vaccine to fight the pandemic. Its drop in price is due to the rapid improvement in economies since the lockdown measures are being eased.

Drop-in Prices of Gold

The cost of gold had risen, but the gains were quickly halted by the news that a coronavirus vaccine could be ready by the end of the year. The drop in the rates of infections and a high number of discharges were also some significant factors that led to that drop. Due to those factors, prices started to drop tremendously by over 0.6% by the 26th of August, and the survey indicates that it will further fall by 0.9% by December. Furthermore, a certain gold trading market recorded continuous losses for the first time since June. It is still going to have its fourth loss within the market as the prices keep falling day in day out. The positive sign of getting a potential vaccine very soon has further led to the drop of the gold prices.

The more critical and equitable markets also attract several investors. This action is having effects on the strength of the dollar on gold, according to one of the financial analysts. The investors will also be monitoring if the U.S. Federal Reserve will tolerate the growth of the economy over the monetary value. The Fed chairperson is expected to give a verdict on the monetary policy of the nation.

Financial analysts further insist that the gold prices are still going to be significantly affected than ever seen before. In June, the prices were favorable, and it was rising tremendously until August, when it experienced a sudden drop. The drop has further been catalyzed by the attitude of ETF investors. It will be tough for the prices of gold to rise again without the intervention from the ETF traders.

Furthermore, the flatness in the SPDR, the world’s largest gold traders’ gold shares for five continuous sessions has led to the rapid decrease in the prices of this precious metal. It has been termed as the most significant daily decline of gold prices for the last three months. However, the gold traders still believe that the prices will normalize once some normalcy resumes. Mining industry players, such as Bullfrog Gold Corp. (CSE: BFG) (OTCQB: BFGC) (FSE: 11B), are expected to watch these developments closely.

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