Here’s how gold, oil and silver prices reacted to Covid-19 vaccine news

By: Michael Harris
Michael Harris
Specialising in economics by academia, with a passion for financial trading, Michael Harris has been a regular contributor to… read more.
on Nov 9, 2020
  • Pfizer and BioNTech report that their vaccine candidate showed to be over 90% effective in Phase 3 testing
  • Crude oil prices skyrocketed as the breakthrough could help recover some optimism in the energy industry
  • Gold and silver prices plunged on the improving risk sentiment

Pfizer (NYSE: PFE) and BioNTech (NASDAQ: BNTX) said today that their coronavirus vaccine candidate showed to be over 90% effective, marking a momentous step in the fight against the deadly virus that has taken more than a million lives around the world. 

“A great day for science and humanity”

Pfizer and its German partner BioNTech are the first pharmaceutical companies to publish successful results from widespread vaccine tests. The drugmakers said there were no important safety issues associated with the vaccine and expect to get regulatory approval for its emergency use by the end of November. 

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Pfizer’s and BioNTech’s positive results represent good news for all coronavirus vaccines that are being developed right now and proof that the virus can be cured with vaccination.

“Today is a great day for science and humanity,” said Albert Bourla, Chairman and CEO of Pfizer.

“We are reaching this critical milestone in our vaccine development program at a time when the world needs it most with infection rates setting new records, hospitals nearing over-capacity and economies struggling to reopen.”

Oil prices scream higher on improved outlook for energy demand

Shortly after Pfizer’s announcement, prices of oil skyrocketed as the breakthrough could help recover some optimism in the energy industry. Pfizer’s announcement is of utmost importance for the oil industry, which has been pounded in the spring, causing the US crude to go negative for the first time in history.

Crude oil prices soared about 11% to $41.29 a barrel after Pfizer’s announcement that the vaccine is much more effective than health experts anticipated. Oil prices made progress today to mark its best day since May.

Following the breakout of the virus, the energy industry was battered as demand for jet fuel and gasoline sharply declined. 

Oil represents one of the critical aspects for the growth of the global economy and investors were concerned that the reintroduction of lockdown measures across Europe due to the resurgence in coronavirus cases would furtherly curb global economic expansion.

“Oil is rallying like a mad thing, joining the dots between a potential vaccine and a rebound in global demand growth,” said Matt Smith, head of commodity research at ClipperData.

Crude oil traders will now hope to stage a more sustainable recovery as a move above $43 will likely pave the way for a push towards the $50 mark.

Gold prices slip on improving risk sentiment

On the other hand, gold spot prices crashed nearly 5% on the vaccine announcement and dwarfed its safe-haven appeal. Earlier, spot prices hit its highest mark in almost two months at $1,965.33 per ounce thanks to a weak USD and on hopes for an additional stimulus, after Joe Biden’s triumph in the presidential election in the United States. 

“There’s some belief that this is going to be a driver for economic growth as we come out of the pandemic situation, so it’s positive news for the world, but negative news for gold,” said independent analyst Ross Norman. 

Stocks also yielded gains on the vaccine news, placing Wall Street on a good path to hit record highs. But a weakening dollar index, which hovered around its 10-week low, helped bullion stay above the critical $1,900 level.      

However, today’s news pushed gold prices lower to test the critical support line near the $1,860 mark. A break below these levels will open the door for $1,840, where gold buyers are likely to wait.

Silver prices join gold in a trip lower as Citi cuts price target

Silver buyers are having even a troublesome day as the precious metal trades more than 7% in the red. The buyers are now fighting to close above the $24 mark and therefore avoid a close below the 200-DMA, which is likely to invite selling pressure. Next support lower is located at $22.80.

Citibank, which is known as one of the biggest silver bulls, expects prices to reach as much as US$100/oz.  

The market sentiment surrounding silver stayed positive ahead of additional economic stimulus around the world, picking up ground in terms of industrial activity and once again proving its ability to outshine gold. 

However, Citibank has been the biggest proponent of silver. The bank said the metal could reach the price of $US40/oz silver within 6-12 months or even peak to US$50/oz-US$100/oz based on the bank’s technical analysis.

“We see the investment-led deficit in silver continuing in 2021, with the call on silver stocks driving prices up to US$30/oz over the next 3-4 months and up to US$40/oz over the next 6-12 months,” the bank analysts wrote in a note.

“Since the case for silver is in part dependent on investment demand, some portion of the investment community looks at the market’s technicals. It is worth noting that the Citi FX technical team is very bullish silver, with US$50/oz a very realistic target and US$100/oz possible.”

The bank expressed its bullishness on silver following Goldman Sachs’ advice to investors to sell the USD and invest in silver instead. 


The U.S. drugmaker Pfizer said its COVID-19 was more than 90% effective, a crucial development that sent oil prices and the stock market soaring while gold and silver prices plunged.

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