Gold price weakened on Covid-19 vaccine news

The price of gold weakened this past week on Covid vaccine optimism and finished the week below $1900. Pfizer and BioNTech announced that their jointly developed COVID-19 vaccine which is effective in more than 90% of the patients.

Fundamental analysis: Gold price is still supported by uncertainty over the global economic future

Gold is considered a safe-haven asset and the price of gold has weakened as Pfizer announced that it will have a coronavirus vaccine ready in the United States by the end of this year. The US stock market is still supported by upbeat over the prospect of a divided Congress and less risk of major policy changes which is negative for the price of gold.

Joe Biden won the presidential election and become the 46th president of the United States. Despite this, gold price remains in an uptrend and investors trading gold are expected to be more active in the next several weeks.

The attention of investors is focused currently on the US stimulus aid package negotiations and on the situation with COVID-19 pandemic. COVID-19 cases in the US continue to rise while Europe is not faring any better with this pandemic.

The US reported over 180K new cases in one day and the pandemic pushed U.S. hospitals to the brink of capacity. This is certainly not good for the economy but this could add another push to the price of gold.

While the markets may continue welcoming upbeat vaccine news, rising Covid cases and the ongoing delay in US fiscal stimulus could keep gold prices afloat.

Technical analysis: Bulls are focused on breaking the resistance level at $1900

The current resistance levels are $1900, $1950 and $2000, $1850 and $1800 represent the current support levels. If the price jumps above $1900 it would be a signal to buy gold and we have the open way to $1950.

Rising above $2000 supports the continuation of the bullish trend and the next price target could be located around $2200. On the other side, if the price falls below $1850 it would be a “sell” signal and we have the open way to $1800.

Summary

Gold is considered a safe-haven asset and the price of gold has weakened as Pfizer announced that it will have a coronavirus vaccine ready in the United States by the end of this year. Despite this, gold price remains in an uptrend and investors trading gold are expected to be more active in the next several weeks. Gold price is still supported by uncertainty over the global economic future and rising Covid cases could keep gold prices afloat. If the price jumps above $1900 that would be a confirmation of the “bullish” trend and the open way to $1950 or even $2000.